Walgreens Boots Alliance (Nasdaq: WBA) is accelerating its plans to invest in the post-acute care space and in the home.
This week, it finalized its acquisition of the health-at-home solutions company CareCentrix.
Walgreens initially announced a $330 million investment in CareCentrix in October of 2021. At the time of the deal, Walgreens gained a 55% stake in CareCentrix at an $800 million valuation, with an option to buy the remaining equity interests.
On Tuesday, Walgreens announced it was fast-tracking its way into the home by acquiring the remaining 45% stake in CareCentrix for $392 million.
“We continue to see strong results and potential for growth from our partnership with CareCentrix. Our full acquisition further accelerates our transformation to become a consumer-centric healthcare company, leveraging innovative platforms that extend our capabilities into fast-growing segments of healthcare,” Walgreens CEO Roz Brewer said in a statement. “CareCentrix is key to offering services to our patients at every stage of the care continuum, and to driving long-term, sustainable growth as part of our U.S. Healthcare strategy.”
The deal is expected to be finalized in March of 2023.
Walgreens also announced that CareCentrix CEO John Driscoll will be shifting roles. Driscoll has now been named the executive vice president and president of U.S. Healthcare at Walgreens.
“John brings a wealth of experience and leadership across many different aspects of healthcare, all of which will play an important role in delivering on our vision to reimagine local healthcare for all,” Brewer said. “He has demonstrated high levels of success by building winning teams, and rapidly scaling technology-enabled solutions and analytics that make healthcare more personal and effective.”
Driscoll’s role – plus, of course, Walgreens’ interest in CareCentrix in the first place – shows how integral home-based care will be in the company’s strategy moving forward.
“We’re definitely in the early innings of what I think is going to be a long game,” Driscoll told Home Health Care News in September. “When you look at Walgreens’ assets, they have their community pharmacists, a trusted brand, a trusted relationship and a more frequent relationship between the patient and the store than most patients have with their doctors. Walgreens has the privileged position to be able to inform, influence and support care in the community.”
The Hartford, Connecticut-based CareCentrix manages care for over 19 million members through its network of more than 7,400 provider locations in over two dozen states. As a convener, the company supports various at-home models, including home nursing, DME services, home infusion and in-home palliative care.
The news is yet another indication that the larger retailers like Walgreens and CVS Health (NYSE: CVS) are all-in on home-based care.
Last month, CVS Health agreed to acquire Signify Health (NYSE: SGFY). Now, the competitors each have significant at-home care conveners within their networks.
“CVS’ purchase of Signify is just an endorsement of what CareCentrix and many others have been saying for many years,” Driscoll said. “The opportunity is huge: to deliver better outcomes at lower cost by keeping people out of the hospitals and nursing homes who don’t need to be there.”
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