Duke University Health System and Novant Health Announce Partnership to Increase Access
The two health systems plan to jointly open care sites across North Carolina with a stated goal of increasing access to quality care for patients.
In a press release, Novant Health CEO Carl Armato said that the two systems shared a vision for healthcare and that the “collaboration means the communities we serve together will benefit from our combined focus on quality, innovation, and excellence in patient care.”
The new campuses will include clinicians from both Novant and Duke, with plans to increase access to primary care, specialty care, as well as telehealth and virtual care options.
Duke and Novant’s partnership illustrates a growing trend—partnership alternatives to traditional M&A that expand patient access in a more capital-light way.
Construction on the new sites is expected to begin across the summer and fall.
Walgreens revives PE deal to go private
According to a new report in The Wall Street Journal, Walgreens has reached a deal with PE firm Sycamore Partners to take the struggling retail chain private in a $23.7B deal. Walgreens’ stock rose 10% on the news.
Sycamore is expected to keep the core U.S. retail business and sell off (or take public) other parts of the company. The PE firm followed a similar playbook when it acquired the office-supply retailer Staples for $6.9B in 2017.
The news comes several months after Walgreens announced plans to close up to 1,200 underperforming locations (15% of their overall footprint) and sell off its remaining stake in VillageMD. Walgreens also sold off its remaining shares in the drug distributor Cencora for $1.1B last August. Together, these moves have been widely interpreted as a retreat from the company’s ambitions to become a retail primary care disruptor.
The acquisition could provide Walgreens with a much-needed infusion of cash and give the retailer a longer runway to figure out its faltering healthcare ambitions.
Like other retail pharmacy chains (including CVS), Walgreens’ margins have steadily eroded since 2018. While turning around this trend is a tall order, Sycamore’s likely decision to spin off other parts of the business could give the pharmacy a renewed focus. Closing hundreds of underperforming stores and reducing the complexity of their offerings could help them more easily identify profit centers to expand and cost drivers to cut.
