Duane Reade is owned by private-equity firm Oak Hill Capital Partners L.P. and operates 257 drugstores in the New York metropolitan area. Its sales totaled $1.8 billion last year and it has the highest sales per square foot in the U.S. industry, according to Walgreen.
"We like their footprint, how it matches up with us," Walgreen Chief Executive Greg Wasson said of Duane Reade in a Reuters interview. "(It) gives us a leading presence in Manhattan as well as supplements what we have in the boroughs in New York."
The deal price includes the assumption of $457 million in debt. Oak Hill Capital Partners took Duane Reade private in July 2004 in a transaction valued at about $700 million, also including debt.
Duane Reade makes Walgreen the biggest drugstore chain in New York’s five boroughs, ahead of Rite Aid Corp. and Woonsocket, Rhode Island-based CVS Caremark Corp., which is second in the U.S. in stores and retail sales. Walgreen operates more than 7,100 stores, including 70 in the New York area.
Duane Reade opened its first store on Broadway between Duane and Reade streets in 1960. Oak Hill bought Duane Reade for about $680 million and $284 million in debt in 2004, according to Bloomberg data. In the 12 months ended Dec. 26, the chain had $1.8 billion in revenue.
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