Walgreens keeps hand in home infusion

DEERFIELD, Ill. - The sale of its home infusion business to a private equity firm will give Walgreens the chance to double down on the growing market.

“Walgreens believes in the home infusion industry,” said Justin Ishbia, founder and managing partner of Shore Capital Partners, a private equity firm that used own a competing home infusion company. “They're not trying to exit it.”

Per the deal, announced Jan. 20, Madison Dearborn Partners, a Chicago-based private equity firm, will acquire a 51% majority stake in Walgreens Infusion Services. The firm will take the company private, according to a release.

Paul Mastrapa, divisional vice president of Walgreens, will become CEO of the new company.

“Paul is respected in the industry and he's built the team that is going to be carrying it forward,” said Reg Blackburn, a managing director with The Braff Group. “That's a positive for the business—to have that experience and credibility in the market.”

The deal will give Walgreens the financial fuel to accelerate growth, say analysts.

“I think they'll be tightly focused on acquisitions,” said Ishbia.

There's plenty of opportunity for Walgreens to grow its existing home infusion business, as well, including IVIg, a popular therapy, say analysts.

“I think IVIg is one of the fastest-growing sectors in the home infusion market,” said Blackburn, “and that's a space Walgreens plays in today.”

Walgreens entered the home infusion space when it acquired OptionCare for $850 million in 2007. It traded its long-term care pharmacy business for OmniCare's home infusion business in 2010, making it the largest provider in the space.