Walgreens Boots Alliance is exploring the sale of Shields Health Solutions, its specialty pharmacy business, Bloomberg News reported.
The Tuesday report, which cited people familiar with the matter, said Shields could be valued at more than $4 billion and draw interest from private equity firms and healthcare companies.
Related: How Walgreens' John Driscoll plans to make VillageMD profitable
A Walgreens spokesperson declined to comment on Wednesday.
Walgreens acquired a minority stake in Shields in 2019, later taking a 70% stake in 2021. In 2022, Walgreens agreed to purchase the remaining stake for about $1.37 billion. Shields, which named Stephen West as CEO in January, has nearly 80 health system partners representing about 1,000 hospitals.
Shields reported a 27% increase in pro forma sales in the first quarter of Walgreens' fiscal 2024.
Shields is one business in Walgreens' U.S. healthcare segment, which also includes primary care provider VillageMD and home care company CareCentrix. The segment has recently come under scrutiny for failing to deliver on promised returns, despite billions of dollars in investments over the last few years. It reported a $436 million operating loss in Walgreen's first quarter, flat with a year ago.
Walgreens executives are trying to stage a turnaround for U.S. healthcare and relying heavily on VillageMD to drive growth. CEO Tim Wentworth, who has said he is evaluating all options to shore up earnings, implemented a $1 billion cost-savings initiative late last year, with much of those savings coming from pharmacy operations and capital projects. The company cut its dividend by nearly half in January, to 25 cents per share.
