Walgreens to Purchase Pharmacy Files of 185 Fred's Pharmacies

By Michael Dabaie

Walgreens Boots Alliance Inc. (WBA) agreed to acquire the pharmacy patient prescription files and related pharmacy inventory of 185 Fred's Inc. (FRED) stores located across 10 Southeastern states.

Shares of Fred's soared 46.79% to $2.40 in recent premarket trading.

Under the asset-purchase agreement, Walgreens would pay Fred's $165 million, subject to adjustment, plus an amount equal to the value of related pharmacy inventory.

Fred's will continue to operate its retail stores at most of these locations after the pharmacies close. Once the transaction is complete, Fred's will continue to operate about 162 pharmacies across nearly 600 stores. Fred's pharmacy staff at the closing locations will be able to apply for any available positions at Walgreens.

The companies expect the file transfers to begin in the fourth quarter and be completed in the first quarter of 2019.

"With this agreement, we have taken a major step towards achieving one of our main goals of eliminating our debt balance," said Joe Anto, interim chief executive and chief financial officer of Fred's.

Write to Michael Dabaie at [e-mail]

(END) Dow Jones Newswires

September 10, 2018 08:48 ET (12:48 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.