Goldman Sachs is leading a $4.25bn debt financing package to support Sycamore Partners’ $12.5bn acquisition of Walgreens Boots Alliance’s UK-based pharmacy chain, in what could become one of the largest private equity-backed debt transactions of 2025.

The financing will be underwritten by a consortium of major banks including Citigroup, Deutsche Bank, JPMorgan Chase, UBS, and Wells Fargo. According to sources familiar with the matter, the group has begun strategising marketing plans for a bond and leveraged loan package expected to launch between June and July.

The financing package is likely to be structured flexibly, with a mix of high-yield bonds and leveraged loans, and may also attract commitments from private credit funds. The transaction will test investor appetite in a recovering leveraged finance market, which had slowed due to geopolitical volatility and US tariff uncertainty.

Market sentiment has improved in recent weeks, with high-yield issuance rebounding on both sides of the Atlantic. Notably, a European high-yield issuer nearly doubled the size of its bond offering during bookbuilding, indicating growing risk appetite.

The Boots transaction adds to a wave of large-scale financings hitting the market. Flutter Entertainment is preparing a €2.5bn bond offering for its acquisition of Playtech’s Italian gambling arm, while a $2bn debt package is being assembled for Silver Lake’s investment in chipmaker Altera. Separately, KKR and Apollo have each tapped the private credit markets for multi-billion dollar financings in recent weeks.

For Sycamore, the Boots acquisition is a cornerstone investment in the consumer healthcare space. The ability to syndicate a substantial portion of the deal’s debt reflects renewed confidence in sponsor-backed M&A and the depth of both syndicated and private credit markets.

Source: Bloomberg