Sycamore Partners is targeting a doubling of Walgreens’ profitability to $4bn following its $10bn take-private acquisition.

The strategy aims to increase earnings before interest, taxes, depreciation, and amortisation from approximately $2bn in 2024, reflecting a focus on operational improvements and revenue growth.

Sycamore has already begun implementing cost reduction measures, including workforce adjustments, while also seeking to enhance store performance through product expansion and improved pricing dynamics.

The firm is also benefiting from improved reimbursement rates for prescription drugs, with certain previously loss-making products now contributing positively to profitability.

Walgreens is expected to deliver adjusted EBITDA of around $2.5bn this year, supported by revenues exceeding $120bn, indicating early progress in the turnaround strategy.

Sycamore may look to exit the investment once profitability targets are achieved or return capital through dividends if it retains ownership for longer.

The buyout comes after a prolonged period of underperformance as a public company, with Walgreens facing increasing competition from online retailers and large-format chains.

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