Rite Aid Corporation (NYSE:RAD) has revealed that it has so far transferred 625 retail outlets as well as related assets to Walgreens Boots Alliance Inc (NASDAQ:WBA). In return Rite Aid has received cash amounting to approximately $1.3098 billion which the pharmaceutical retailer has earmarked for the payment of secured loans that are outstanding to the tune of $970 million. Rite Aid is also using the cash proceeds to maintain a health liquidity position.
Under a deal signed with Walgreens Boots Alliance, 1,932 retail outlets belonging to Rite Aid will be purchased by the former. Additionally Walgreens Boots Alliance will also acquire three distribution centers as well as related inventory at a price of $4.375 billion.
“Our teams continue to make tremendous progress in transferring stores to WBA and I want to thank them for their ongoing commitment and dedication … we remain focused on the continued smooth execution of that process,” the chairman and chief executive officer of Rite Aid, John Standley, said.
The provision of an update by Rite Aid with regards to sale of stores to Walgreens Boots Alliance comes in the wake of the drugstore chain agreeing to pay $4 million in a bid to resolve a criminal probe initiated by the U.S. Justice Department. Rite Aid had been accused of improperly selling pseudoephedrine, a key ingredient in the making of methamphetamine, a stimulant.
Training and procedures
The claims against Rite Aid indicated that the training and procedures of the pharmaceutical retailer had made its workers in the state of West Virginia make the assumption that the only reason they needed to deny a customer pseudoephedrine was if they thought the customer in question had exceeded the specified purchase limits. Thus even if the employees had reason to believe that the customer was buying in order to manufacture meth, they could still sell pseudoephedrine to them.
Pseudoephedrine is found in medicines for treating colds such as Sudafed but its sale is restricted by federal law with a view to preventing its abuse and illegal use such as making meth. As a stimulant meth can curb appetite and boost energy though it is linked to negative behavior such as aggression and adverse effects that include strokes, insomnia, and anxiety.