NEW YORK—Internet retailer Drugstore.com on Thursday agreed to be sold to national drugstore chain Walgreen Co. for $429 million.
Walgreen, which operates the nation’s biggest pharmacy Walgreens, will pay $429 million in the all-cash deal, at $3.80 per share and a 112 percent premium over Drugstore.com’s closing stock price Wednesday. The news sent shares of Drugstore.com soaring on Thursday, as its common stock increased 113 percent to $3.82.
The acquisition immediately gives Walgreen an advantage on the Web against its rivals, such as CVS Caremark Corp. and Rite Aid Corp. as it gains Drugstore.com’s 3 million customers. The company will also gain access to Drugstore.com’s sister sites Beauty.com, VisionDirect.com, and SkinStore.com.
Walgreen, which operates the nation’s biggest pharmacy Walgreens, will pay $429 million in the all-cash deal, at $3.80 per share and a 112 percent premium over Drugstore.com’s closing stock price Wednesday. The news sent shares of Drugstore.com soaring on Thursday, as its common stock increased 113 percent to $3.82.
The acquisition immediately gives Walgreen an advantage on the Web against its rivals, such as CVS Caremark Corp. and Rite Aid Corp. as it gains Drugstore.com’s 3 million customers. The company will also gain access to Drugstore.com’s sister sites Beauty.com, VisionDirect.com, and SkinStore.com.
Walgreen described Drugstore.com’s 3 million customers as “savvy, online loyal,” according to a statement by CEO Greg Wasson. He also praised Drugstore.com’s “well-recognized presence in the health, personal care, beauty, and vision categories,” which “will complement and extend many of our own multichannel initiatives that have been driving growth in our business.”
The Internet pharmacy retailer was founded in Bellevue, Wash., during the dot-com boom, and its biggest current shareholder is Seattle-based Internet retailer Amazon.com. The actual price paid by Walgreen was $409 million, as Drugstore.com had $20 million in cash on its balance sheet.
Drugstore.com has never made annual profits since its founding. It lost $0.66 million in the latest quarter ended January, according to company filings. By comparison, Walgreen had revenues of $18.5 billion last quarter, and made profits of $739 million.
Walgreen has a history of acquiring rivals. Duane Reade, the ubiquitous New York pharmacy chain, was recently snapped up by Walgreen.
The Internet pharmacy retailer was founded in Bellevue, Wash., during the dot-com boom, and its biggest current shareholder is Seattle-based Internet retailer Amazon.com. The actual price paid by Walgreen was $409 million, as Drugstore.com had $20 million in cash on its balance sheet.
Drugstore.com has never made annual profits since its founding. It lost $0.66 million in the latest quarter ended January, according to company filings. By comparison, Walgreen had revenues of $18.5 billion last quarter, and made profits of $739 million.
Walgreen has a history of acquiring rivals. Duane Reade, the ubiquitous New York pharmacy chain, was recently snapped up by Walgreen.
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