Rite Aid Corporation (NYSE:RAD) has concluded the pilot closing and initial subsequent closings under the modified and restated asset purchase deal finalized on September 18, 2017, leading in the transfer of 97 Rite Aid outlets and related resources to Walgreens Boots Alliance Inc (NASDAQ:WBA).
Under the amended and restated deal, Walgreen Boots will buy a total of 1,932 stores, 3 distribution centers and related assets from Rite Aid for $4.375 billion. The two companies anticipate to continue to transfer ownership of the outlets in phases over the imminent months, with the objective being to complete the store transfers in 2018.
The majority of the final conditions have been met, and the subsequent transfers of stores and related assets will be subject to customary closing conditions pertinent only to the stores being moved at such subsequent closing, as stated in the asset purchase deal.
John Standley, the CEO and Chairman of Rite Aid, expressed that successfully concluding the pilot closing and initial subsequent closings marks a vital step in realizing the complete benefits of this deal. He is proud of the entire team for their dedication and commitment to helping them achieve this milestone. Standley added that he also wants to thank their team for their relentless support as they complete the transfer procedure over the imminent months and implement their plans to deliver better results.
Rite Aid anticipates to use a considerable part of the net proceeds from the deal to close existing indebtedness thereby enhancing the firm’s leverage levels. In addition, the company presently anticipates to incur a minimal cash tax payment on this deal, as the gain it will post on the assets sale is anticipated to be mainly offset by its net operating loss carryforwards. Rite Aid is one of the nation’s major drugstore chains with FY2017 annual revenues of $32.8 billion.