Walgreens-backed primary care provider VillageMD has sold 11 Rhode Island clinics to Arches Medical Partners, the medical group management company said Wednesday.
Boston-based Arches took over the clinics, which consist of eight offices and three urgent care centers, effective March 2, according to the VillageMD website. Financial details of the deal were not disclosed.
Related: Walgreens closes 2 distribution centers, lays off 646 employees
Arches said the deal gives it a presence in the Providence metro area, covering about 75,000 patients. It employs 50 primary care physicians at the clinics. Arches, formed in 2023, is looking to "grow organically and quickly," CEO Dr. Chris Kryder said in a news release.
The transaction marks the first time VillageMD has sold clinics to another company, rather than close them, as part of Walgreens' efforts to slash the primary care chain's footprint. So far this year, VillageMD has closed or plans to close more than 80 clinics.
Walgreens implemented a $1 billion cost-cutting plan late last year, which involved cuts in its pharmacy division and in capital spending, plus shuttering dozens of clinics.
VillageMD has said it plans to close all its Illinois clinics in April. It shuttered all Florida locations this month and all its Massachusetts clinics in February. In January, VillageMD closed three clinics in New Hampshire, 10 sites in Jacksonville, Florida, and all 12 of its clinics in Indiana.
VillageMD's footprint still spans multiple states, including Arizona, Colorado and Georgia.
Walgreens invested $5.2 billion to take a majority stake in VillageMD in 2021 and had big plans to roll out hundreds of new clinics attached to Walgreens stores. The company has since pulled back on its expansion plans, which also included micro fulfillment centers, and has left industry watchers wondering what went wrong with a strategy Walgreens touted exuberantly for years.
Walgreens' larger healthcare services division, which includes VillageMD, has been in the spotlight in recent months due to slower-than-expected returns and $1.73 billion in operating losses in 2023.
Last month, Walgreens said John Driscoll would step down as president of the U.S. healthcare business and transition to an advisory role. He is being replaced by Mary Langowski, a health tech executive and former chief strategy and corporate development officer at CVS Health. She is taking over this month.
