ATLANTA (Reuters) – Drug Fair Group, a New Jersey pharmacy chain, said on Wednesday it filed a voluntary petition for Chapter 11 reorganization and has an agreement to sell some assets to Walgreen Co (WAG.N). In a statement, Drug Fair said it reached an accord with a Walgreen subsidiary to sell assets associated with 32 of its stores.
The proposed deal is subject to approval of the U.S. Bankruptcy Court in Delaware, where Drug Fair and its parent company, CDI Group Inc, filed for Chapter 11. Drug Fair added that prior to filing for bankruptcy
reorganization, it sold various assets at 13 locations to third parties, including Walgreen. It said Walgreen had purchased prescription files from 11 Drug Fair locations.
Walgreen has made more acquisitions in recent years as the drugstore industry comes under pressure from Wal-Mart Stores Inc’s (WMT.N) late-2006 introduction of $4 monthly prescriptions on many generic drugs. In February, Walgreen announced that it agreed to buy 12 stores from Rite Aid Corp (RAD.N). Drug Fair said it has arranged a four-month secured debtor-in-possession financing facility of $40 million that it would use to fund operations. Walgreen shares were down 19 cents at $24.11 in afternoon New York Stock Exchange trading.
(Reporting by Karen Jacobs and Jessica Wohl, editing by Matthew Lewis)
peHUB Note: Drug Fair is a portfolio company of Sun Capital Partners.