The Canadian branch of the Weston family has agreed to buy Boots from private equity firm Sycamore Partners in an $8.9bn deal. Wittington, the Westons’ investment vehicle, is partnering with Toronto-based Fairfax Financial Holdings, which will own 50 per cent while the Westons retain operational control. Galen Weston Jr will become chair of Boots.
Sycamore acquired Boots last year as part of its $23.7bn purchase of Walgreens Boots Alliance, in partnership with Stefano Pessina and his family. Following the takeover, Sycamore split the group into five standalone companies, one of which was Boots. Pessina and his family hold a 44 per cent stake in each.
With his partner Ornella Barra, Pessina has been closely involved with Boots since merging it with Alliance Uni Chem in 2006. He later teamed up with KKR to take Boots private before reversing it into Walgreens. Sycamore and Pessina will retain ownership of Boots’ interests in Mexico’s Farmacias Benavides and Germany’s Alliance Healthcare Deutschland.
The deal is expected to close in the first quarter of next year. Performance at Boots has improved in recent years, driven by investments in its beauty halls, although many of its 1,800 stores have seen little investment. The sale ends the prospect of Sycamore floating Boots on the London stock market.
Nottingham-based Boots recently appointed former Currys boss Alex Baldock as chief executive. CIBC and Morgan Stanley were lead financial advisers to Wittington while Skadden provided legal advice. A&O Shearman advised Fairfax.
UBS and Rothschild advised Boots, with Davis Polk acting as legal adviser to the group.
Source: Financial Times Companies · Summarized by HeadlinesBriefing