In a transaction that will see the opening of hundreds of doctor's offices at its stores, Walgreens Boots Alliance is set to increase its investment in order to become the majority owner of healthcare provider Village MD. By 2025, 600 or more primary care clinics will spring up in over 30 U.S. markets, and the clinic count will swell to 1,000 by 2027.
The majority ownership stake is one aspect of an overall effort from Walgreens to transform its properties from "corner drugstores" into all-encompassing healthcare go-tos. The updated retail locations, equipped with care providers able to write prescriptions, will subsequently draw more traffic and substantially augment Walgreens' medical portfolio.
Each added Village MD clinic is planned to be around 3,300 square feet, roughly a quarter of the size of an average Walgreens. Both companies have indicated that these offices will permit myriad health insurance plans, along with an out-of-pocket option and a sliding scale for insurance-less customers.
The deal entails a $5.2 billion investment in VillageMD from Walgreens, which accounts for the 30%-to-62% ownership bump. VillageMD, however, will stay independent and keep its own management and board. Pending regulatory approval, Walgreen estimates that the transaction will close by the end of the year.