Walgreens Boots Alliance Invests $970B in Shields to ‘Further Expand Its Health Care Reach in Communities’

Walgreens Boots Alliance (Nasdaq: WBA) plans to invest $970 million in Shields Health Solutions, which aids both hospitals and health systems with specialty pharmacy services.

It’s another major move for Walgreens, which is trying to position itself as an all-encompassing health care behemoth prepared for the sector’s near- and long-term trends.

The deal, which is set to close in February of 2022, would give Walgreens a 71% stake in the Massachusetts-based Shields, with an option to acquire the remaining portion of the company thereafter.

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Walgreens first took interest in Shields when it made a minority investment in the company in 2019.

Similar to its $1 billion investment in the value-based primary care provider VillageMD in 2020, the investment in Shields takes Walgreens further into community-based care and also reemphasizes its focus on patients with complex needs.

“Delivering pharmacy and healthcare services in the local community is one of many ways WBA is working to improve access and health outcomes, as well as to lower the total cost of care,” Roz Brewer, the CEO of Walgreens Boots Alliance, said in a press release. “We’re continuing to make strategic investments in pharmacy and health care solutions that can build on our core pharmacy business, and further expand our health care reach in communities.”

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In the meantime, Walgreens will work with Shields — as well as Shields’ other investors, including Welsh Carson, Anderson & Stowe (WCAS) — to scale its business model by “adding complementary provider-based services to the portfolio over time.” That could certainly mean home health or home care, both of which match nicely with specialty pharmacy services.

“The Shields model has shown to improve patient care, and will be complementary to our existing specialty pharmacy offering, further expanding our capabilities to best meet the needs of health system partners and patients,” Brewer continued.

Some of the largest companies in the country are currently in an arms race to get ahead of where health care is going in the U.S. In particular, that means a heightened focus on home-based care and senior care, as the 65-and-above population is projected to double in the next decade, with most preferring to age in place.

Amazon (Nasdaq: AMZN) and Walmart (NYSE: WMT), for instance, are delving further into health care by the month, while CVS Health (NYSE: CVS) remains a direct competitor with similar goals.

Each of these companies has also directly or indirectly reached further into the home. For instance, Amazon Care — Amazon’s on-demand care platform — is aggressively expanding across the country.

On Walgreens’ end, VillageMD has continually touted its ability to serve patients in their homes and in the community.

“Shields pioneered the integrated, health system specialty pharmacy approach that has quickly gained traction in the industry,” Shields CEO Lee Cooper said in a press release. “In doing so, we have consistently delivered exceptional growth and value through a model that research shows leads to better outcomes and quality of life. WBA’s further investment in Shields is a validation of our proven growth strategy.”

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