With Walgreens no longer pursuing a primary care strategy under its new owner, VillageMD is looking for new buyers for potentially hundreds of doctor practices and outpatient clinics across the country.
VillageMD, which was sold to private equity firm Sycamore Partners last week in the $10 billion takeover of Walgreens, has hundreds of physician practices, outpatient health centers, urgent care sites and clinics adjacent to Walgreens stores. VillageMD now operates as a standalone company that Walgreens investors hope will fetch a high sale price given the financial terms of the company’s sale to Sycamore.
“In addition to their cash consideration of $11.45 per (Walgreens Boots Alliance) share, WBA shareholders will receive one non-transferable right to receive up to an additional $3.00 in cash per WBA share from the net proceeds of the future monetization of WBA’s debt and equity interests in VillageMD, which includes the Village Medical, Summit Health and CityMD businesses,” Sycamore and Walgreens said last week in the press release announcing the close of the company’s sale to the private equity firm. A public relations firm representing Sycamore had no further comment beyond last week’s press release.
Reached Tuesday, Chicago-based VillageMD wouldn’t comment on whether the company was already working with bidders nor would the company provide a comment on what exactly was for sale.
VillageMD spokeswoman Molly Lynch said VillageMD’s assets include “more than 130 practices” under the Village Medical brand including about 90 clinics adjacent to Walgreens drugstores. In addition, CityMD has “more than 185 clinics” and Summit Health has “more than 130 locations” while Starling Physicians has “more than 20 practices.”
Walgreens investment in VillageMD was expensive, and cost the drugstore chain billions of dollars. Under former chief executive Roz Brewer, Walgreens invested more than $6 billion in VillageMD to take a controlling stake.
Walgreens eventually scaled back dramatically on the expansion of doctor practices and clinics VillageMD opened. In 2020, Walgreens said it planned to open 500 to 700 “Village Medical at Walgreens” physician-led primary care clinics in more than 30 U.S. markets over five years, with the “intent to build hundreds more thereafter.” By the time, Walgreens was sold to Sycamore, there were around 90 Village Medical at Walgreens clinics.
Tim Wentworth, who replaced Brewer in October 2023 as Walgreens CEO, said a year ago that the company and its partner VillageMD had slowed the number of clinic openings in part because the operators weren’t able to fill their “patient panels,” which are a certain number of individual patients under the care of a specific provider.
The billions of dollars in losses on the VillageMD investment was largely to blame for a net loss of more than $8 billion for Walgreens fiscal 2024. VillageMD’s founder and CEO Tim Barry left the company last year and a few months after Walgreens disclosed plans to reduce its investment in the primary care company.
