Private equity profits while Walgreens pays

CHICAGO, IL — Sycamore Partners is reportedly nearing a deal to sell British pharmacy chain Boots for roughly $9 billion, just over a year after the private equity firm acquired Walgreens Boots Alliance. The potential sale comes as Walgreens faces billions of dollars in high-interest debt following the buyout.

“Sycamore is already seeing substantial returns from its Walgreens investment, and a Boots sale could make that payday even bigger,” said Jim Baker, executive director of the Private Equity Stakeholder Project. “Meanwhile, Walgreens is carrying billions in debt at high interest rates, with workers and customers set to face the consequences of cost cutting.”

By selling Walgreens Boots Alliance for parts, Sycamore Partners’ acquisition of the company appears to have already been extremely profitable for the private equity firm and other investors, even as Walgreens and its 211,000 employees face a high debt load at very high interest rates. The proposed sale of Boots for $9 billion could generate an even bigger payday for the private equity firm.

Sycamore Partners Wing Co-Invest, one of the vehicles that Sycamore Partners raised to acquire Walgreens Boots Alliance last August, had already more than doubled in value (2.28x) as of June 30, less than a year after the buyout, according to reports from one investor.

Part of the reason the buyout has been so profitable for Sycamore is that it financed the August 2025 buyout mostly with debt secured by Walgreens. As of June 2025 the company reported that $13.3 billion, or 71%, of the purchase price was to be funded with debt.

Meanwhile, it appears that Sycamore Partners disproportionately loaded Walgreens, the US pharmacy chain with 211,000 employees, with as much as $8.57 billion in debt at interest rates as high as 10.67% (as of June 30, 2026).

Prior to the merger, Walgreens reported that Sycamore Partners had obtained $8.57 billion in debt commitments secured by the company’s U.S. retail pharmacy operations and real estate. That is substantially (23%) more debt than the combined Walgreens Boots Alliance had before the Sycamore Partners acquisition ($7,366 billion).

Now, as interest rates are rising, Walgreens and its hundreds of thousands of employees could be squeezed even as Sycamore Partners profits. If Walgreens drew the full $8.57 billion, each quarter point (0.25%) rate increase would cost the company over $20 million more in interest each year.

There have also been concerns of understaffing at Walgreens since the buyout as the company has closed stores and reduced staff.

The Wall Street Journal in 2018 wrote of Sycamore Partners, “With Sycamore’s strategy, it isn’t necessary to spruce up a purchased company. The firm often buys struggling retailers and sells off their most valuable pieces. It cuts costs at whatever remains, sometimes using the savings to extract dividends. The firm tells investors its returns ‘need not depend’ on successfully identifying growth opportunities for its retail targets, according to documents for its new fund.”

“Sycamore appears to have applied that same strategy at Walgreens,” Baker added.