Walgreen to Buy USA Drug, Other Store Brands from LaFrance for $438 Million

by Arkansas Business Staff  on Thursday, Jul. 5, 2012 7:39 am  

Stephen LaFrance Sr., chairman and owner of Stephen L. LaFrance Holdings Inc.

As many of you know Mr. LaFrance, after putting himself through college and pharmacy school, started our company on February 26th, 1968 with a single leased pharmacy in a Gibson's Department store.  He began with a lot of debt, and sales for the first day totaled $26.  Over the last 44 years, quite a bit has changed. Today we are the largest privately held pharmacy chain in the United States with 144 stores in seven states.   This growth has come about not only as a result of the vision and work ethic of Mr. LaFrance, but is also due to the outstanding quality of our team members!

Mr. LaFrance set out to build a company that would serve an increasing number of customers that would operate with the highest moral and ethical standards. And he has accomplished that. But, as always, times and business conditions continue to change. After turning 70 last year and after 44 years of ownership, Mr. LaFrance and his family decided it was time to embrace another change. As they looked to the future, they determined that the best way to grow and sustain the business for our employees, our customers and our communities, would be to join another company that shares our vision.

And today, we are announcing that we have found that company in Walgreens, the nation's largest drugstore chain.  An agreement has been reached to sell all of our stores -- USA Drug, Super D Drug, May's Drug, Med-X and Drug Warehouse - as well as our distribution center and wholesale and private brand businesses to Walgreens.

Over the years Walgreens has always been an excellent competitor - and their story is not unlike our own.  Walgreens has been in business since 1901.  Their current CEO is a pharmacist, beginning his career as an intern at Walgreens while attending pharmacy school. Walgreens shares the values and the commitment we have had from the start, operating at the highest ethical standards. We competed with them well over the years through pricing and customer service.  And today, as we look at the competitive landscape, the growth of mail order and the impact of PBMs, Walgreens is the single company that has embraced change to protect the future of our profession. 

With today's announcement, we expect to finalize, or "close," the acquisition around September 1st. It is important to remember that from now until then, it will be business as usual for all of us.  I know many of you will have questions and, as always, I will be very honest in answering them as we move forward.

I know that any sale like this creates some uncertainty. But remember, Walgreens bought our business because they like the stores that we operate, the customers we serve and the employees that make our business work.

As we put our businesses together after the transaction closes, it is possible that decisions will be made about job reductions and store closings. We will provide advance notice and severance benefits to those whose jobs are affected by the transaction.  These individuals will also be eligible to be rehired as openings occur. But remember, nothing will happen until the closing around September 1st and we will maintain open channels of communication.

Members of our leadership team will be working with Walgreens to decide how to best put our companies together. And I will be staying on after the transaction closes to serve as president of USA Drug operations.

We are committed to keeping all of you informed as the process moves forward. If you are asked by customers, suppliers and other partners about the sale, please remind them that it is business as usual until the closing. For any additional inquiries that come your way, please refer them to our USA Drug website, www.usadrug.com, or have them e-mail customerservice@usadrug.com.  

I want to invite members of our headquarters team and our distribution center to hear directly from our executive management and, where possible, Walgreens leadership. There will be an initial meeting today in the USA Drug Retail Corporate office in Little Rock, one at the SAJ Distribution Center in Pine Bluff and one at the Tulsa office, all held at 10 am.  At 2 pm, in the Little Rock office, I will introduce Eric Anglade from Walgreens.  I am sure that the rest of you will have the opportunity to meet these leaders in the coming days, and in the meantime you can find additional information on the USA Drug Intranet home page under the link USA Drug Transition Information.  This informational page will be updated every Thursday as new information becomes available.

In closing, I want to thank all of you for your dedicated service to our business, the LaFrance family and more importantly our customers and our communities. To all of those who have been with us since the beginning and to those who have joined us since 1968, it has been my great pleasure working with all of you.

As always, thanks for all of your hard work!

Joe Courtright, R.Ph

President & CEO

USA Drug



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