Walgreens unit VillageMD to buy Summit Health-CityMD for $8.9bn

When this deal closes, Warburg Pincus will exit Summit Health-CityMD.

  • The transaction is expected to close in the first quarter of 2023
  • Summit Health has been backed by Warburg Pincus since 2017
  • Together, VillageMD and Summit Health will have more than 680 provider locations in 26 markets

VillageMD has agreed to acquire Summit Health-CityMD, a provider of primary, specialty and urgent care. The deal is valued at about $8.9 billion with investments from Walgreens Boots Alliance, Inc and an affiliate of Evernorth, a subsidiary of Cigna Corporation.

When this deal closes, Warburg Pincus will exit Summit Health-CityMD. Summit Health has been backed by Warburg Pincus since 2017.

VillageMD is a Walgreens’ unit.

Together, VillageMD and Summit Health will have more than 680 provider locations in 26 markets.

“This is an epic milestone in our journey to transform healthcare in the United States. Summit Health-CityMD has been a leader in delivering coordinated, multi-specialty care for decades. We are honored to work side-by-side with their 13,000 strong workforce who are passionately committed to delivering the best outcomes for millions of patients,” said Tim Barry, CEO and Chair of VillageMD, in a statement. “Both organizations share a deep commitment to keeping our patients and clinicians at the forefront of what we do to best serve them.”

WBA will invest $3.5 billion through an even mix of debt and equity to support the acquisition of Summit Health-CityMD. WBA will remain the largest and consolidating shareholder of VillageMD with approximately 53 percent ownership.

The transaction is expected to close in the first quarter of 2023.

WBA employs more than 325,000 people and has a presence in nine countries through its portfolio of consumer brands: Walgreens, Boots, Duane Reade, the No7 Beauty Company, Benavides in Mexico and Ahumada in Chile. Additionally, WBA has a portfolio of healthcare-focused investments located in several countries, including China and the U.S.