Walgreens Boots Alliance (WBA) announced September 20th that it is acquiring the remaining 30% stake in 340B specialty pharmacy company Shields Health Solutions that it did not already own. WBA first invested in Shields in July 2019. Last year, it spent about $970 million to raise its stake in Shields to about 70%. WBA announced that it is acquiring the remaining stake for approximately $1.37 billion. The transaction is expected to close by the end of the 2022 calendar year.
Shields is a leader in the large, fast-growing market of specialty pharmacy, and is one of the primary players to help 340B hospitals build out their own specialty pharmacy infrastructure. In January 2021, it purchased ExceleraRx, a specialty pharmacy network that consists of some of the most established specialty pharmacy programs in the country including Fairview Health, CommonSpirit, Avera Health, Intermountain, Banner and Monument Health.
The acquisition comes just a few months after 340B pharmacy and health-system services provider CPS Solution announced that it had acquired specialty pharmacy services company Trellis Rx, another company that helps run in-house hospital-based specialty pharmacies. In December 2021, pharmacy automation company Omnicell acquired specialty pharmacy company ReCept Holdings. ReCept helps hospitals, health centers, Ryan White Clinics, and other providers open and manage in-house 340B pharmacies and specialty pharmacies.
Omnicell, CPS Solutions and Trellis are all 340B Report sponsors.
“Our full acquisition of Shields will complete another major milestone as part of our consumer-centric healthcare strategy to drive sustainable long-term growth, and we are very pleased with our partnership and integration with Shields,” said Roz Brewer, CEO, WBA. “We can now make further progress on our strategy through Shields’ integrated model, increasing our value to health systems, expanding access to payor partners and supporting improved outcomes and lower costs.”
According to a WBA news release, Shields has served more than 1 million patients, with nearly 80 health system partners representing approximately 1,000 hospitals nationwide.
Shields will continue as a distinct business and brand within Walgreens. John Lucey, co-founder and current president of Shields, will lead the organization as CEO of Shields, and current Shields CEO Lee Cooper will take on a new executive role within WBA. Lucey partnered with Jack Shields 10 years ago to start the business and has led its operations for most of that time.
“This transaction validates our tremendous impact to health systems and specialty patients, as well as the consistent growth and innovation the Shields team has achieved over the last decade,” said Cooper. “As an important business within Walgreens, and under John Lucey’s leadership, Shields will be well-positioned to continue to scale its unique integrated care model for the benefit of all stakeholders.”
“We’re thankful for the outstanding partnership we’ve enjoyed over the past three years with the Shields management team, Founder Jack Shields, UMass Memorial Health and WBA. We greatly appreciate the team’s work to build an awesome company. From day one, it has been a terrific experience working with the Shields and WBA teams,” said Tom Scully, general partner of private equity investment firm Welsh, Carson, Anderson & Stowe.
Scully was President George W. Bush’s Administrator of the U.S. Centers for Medicare & Medicaid Services and served in President George H.W. Bush’s administration in senior health policy roles. He also was President and CEO of the Federation of American Hospitals (representing the for-profit hospital industry) for six years.
