Walgreens to Acquire Kerr Drug

76-store deal expands major drug chain's presence in North Carolina

Published in CSP Daily News

DEERFIELD, Ill. & RALEIGH, N.C. -- Walgreen Co. and Kerr Drug, a privately held regional pharmacy chain in North Carolina, announced today that they have entered into an agreement under which Walgreens would acquire certain assets of Kerr Drug's retail drugstores and specialty pharmacy business.

They did not disclose the terms of the deal. In fiscal year 2012, Kerr Drug's retail drugstores and specialty pharmacy business recorded total sales of $381 million.

The acquisition advances Walgreens strategy to deliver the Well Experience for customers by expanding Walgreens presence in North Carolina, a fast-growing market, including into many smaller communities. Kerr Drug's standard of innovation and excellence in pharmacy service also aligns well with Walgreens strategy to transform the role community pharmacy plays in health care, the companies said.

"The Kerr Drug retail drugstores and specialty pharmacy business are an exceptional addition to the Walgreens family of companies," said Walgreens president and CEO Greg Wasson. "We are closely aligned on the important task of expanding the health care role that community pharmacists can have with their patients, and we share the common goal of stepping out of the traditional drugstore format to create a new experience for our customers."

Kerr Drug chairman, president and CEO Anthony Civello, said, "Kerr Drug's strategy and core principles have always been focused on its unique ability to provide patients access to the most comprehensive and convenient health and wellness offering in the industry. Walgreens is the perfect partner to continue this journey as a patient-oriented company dedicated to expanding the role of the pharmacist as an integral part of health care."

The acquisition is structured as an asset transaction and includes Kerr Drug's 76 retail drugstores and its specialty pharmacy business. The acquisition also includes a distribution center. Kerr Drug will retain ownership of its long-term care pharmacy business.

The transaction is subject to satisfaction of regulatory requirements and other conditions, and is expected to close sometime this year.

Until the acquisition closes, Kerr Drug and Walgreens will continue to operate separately. After closing, the acquired Kerr Drug retail drugstores will continue to operate under their current brand in the near term. Decisions will be made over time regarding the best, most effective way to integrate Kerr Drug's retail drugstores and specialty pharmacy business with Walgreens operations.

As the nation's largest drugstore chain with fiscal 2012 sales of $72 billion, Walgreens operates 8,117 drugstores in all 50 states, the District of Columbia and Puerto Rico. Take Care Health Systems is a Walgreens subsidiary that is the largest and most comprehensive manager of worksite health and wellness centers and in-store convenient care clinics, with more than 700 locations throughout the country.

Kerr Drug was founded by pharmacist Banks Kerr in 1951 and for the past 62 years has served the customers of North Carolina. Kerr Drug is one of the most recognized and respected names in the chain drug industry. With its roots in the Carolinas and headquarters in Raleigh, N.C., Kerr Drug's strategic direction is founded in its unique ability to provide patients, the medical community and health plans access to the most comprehensive and convenient health and wellness offering in the industry. With a mission to be the most comprehensive provider of pharmacy and related health care services, while continuing to be the most reliable provider of health-related and convenience items, Kerr Drug is currently providing services that far exceed the traditional drugstore mix, it said.

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