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Walgreens buys out remaining CareCentrix stake

Sarah Pringle
Oct 12, 2022
Illustration of a first aid bag filled with cash.  

Illustration: Aïda Amer/Axios

Walgreens Boots Alliance is taking full control of CareCentrix, acquiring the 45% not already owned in the post-acute care manager for approximately $392 million, the pharmacy chain said Tuesday.

Why it matters: As rivals dominate headlines with aggressive M&A, WBA has been accelerating its existing efforts. Perhaps just a little more quietly, Sarah writes.

Context: WBA's full buyout of CareCentrix comes just a few weeks after it acquired the remaining stake in specialty pharmacy company Shields Health Solutions for $1.37 billion.

  • WBA also injected $5.2 billion into value-based primary care provider VillageMD in October 2021, upping its stake to 63%.

💭 Our thought bubble: Since WBA's recent M.O. has been to take a stake, then follow with a full buyout, perhaps VillageMD is next on the shopping list.

Catch up quick: WBA last fall announced a 55% majority investment of CareCentrix for $330 million, with an option to buy the remaining interests down the line.

  • CareCentrix manages care for more than 19 million members through 7,400-plus provider locations.
  • The company uses analytics to determine the appropriate site of post-acute care for its members, coordinating care transition around home nursing, durable medical equipment, home infusion and in-home palliative care, among other things.

The backstory: CareCentrix, backed by Summit Partners in 2011, had been on and off the auction block for years before locking hands with Walgreens in 2021.

  • In November 2020, CareCentrix scrapped sale plans after its talks with Anthem fell apart — with customer concentration concerns weighing on that process, which originally targeted a $1 billion EV, sources told Sarah at the time.
  • Deal conversations in a previous 2017 process for CareCentrix were north of $1 billion, but, likewise, talks fell apart due to worries around its payor mix, Sarah wrote.

Meanwhile, CareCentrix CEO John Driscoll later this month will take on the newly created role of executive vice president and president, U.S. Healthcare at WBA — formalizing the pharmacy company's health care efforts.

The bottom line: A deal long in the making, CareCentrix has landed a home at one of a handful of incumbents gung-ho on participating in health care disruption.

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