DEERFIELD, Ill. — Walgreens on Thursday announced that it has signed a definitive agreement with Water Street Healthcare Partners, a strategic investor focused exclusively on the healthcare industry, in which Water Street will acquire a majority interest in Take Care Employer Solutions. Take Care Employer Solutions is a Walgreens subsidiary that manages more than 360 worksite health centers nationwide.
Water Street also has signed an agreement to simultaneously invest in CHS Health Services, a provider of more than 130 worksite health centers. Water Street will merge Take Care Employer Solutions and CHS to form a new company dedicated to providing worksite health centers that improve the cost and quality of employee health care. The new company will have more than 85 years of combined experience in employer health solutions, and will serve more than 200 leading corporations through nearly 500 worksite health and wellness centers located across the country.
“Walgreens, CHS and Water Street share a goal of maximizing employers’ return on their healthcare investment,” said Jeffrey Kang, Walgreens SVP health and wellness services and solutions. “This strategic decision to bring together our organizations’ expertise, capabilities and resources to create a leading worksite health and wellness company provides us an opportunity to play an even greater role in improving the cost and quality of workforce health care. Through our continued involvement in the business and as a preferred strategic partner with Water Street, Walgreens expects to accelerate tighter connections with employers — an important stakeholder in the healthcare delivery system.”
“CHS and Take Care Employer Solutions are both deeply committed to finding new ways to drive positive health care outcomes for our clients and their employees," said Stuart Clark, CHS CEO. "This merger will provide us with a significant opportunity to transform onsite health care. Together, we will have the experience and resources to create innovative strategies that will improve patient engagement and positively impact health outcomes.”
Water Street will own a majority interest in the new company, and Walgreens will own a significant minority interest and have representatives on the new company’s board of directors. The new company will be led by Stuart Clark, CEO. Trent Riley, divisional VP Take Care Employer Solutions Group, will serve as COO. The name of the new company will be determined during the integration process.
Walgreens will continue to manage its existing worksite pharmacies in collaboration with the new company.
Healthcare Clinic at select Walgreens, with more than 400 in-store clinic locations that formerly operated under the Take Care Clinic name, is not part of this transaction. Walgreens will continue to manage these clinics.
Similarly, Comprehensive Health Services, an entity related to CHS that specializes in government contracting health services and logistics, is not part of this transaction. It will remain an independent organization with no changes to its ownership structure or leadership team.
Financial terms of the agreement were not disclosed. Walgreens anticipates the transaction will not have a material impact on earnings per share in fiscal year 2014.
The transaction is subject to satisfaction of regulatory requirements and other conditions, and is expected to close by mid-calendar year 2014. Until the close of the transaction, Take Care Employer Solutions and CHS will operate business as usual and as separate companies.