Leerink says Walgreens, Sycamore deal ‘far from a slam dunk’

Leerink says that since the news hit of the Walgreens Boots Alliance (WBA) potential go-private exploration, the firm has gotten numerous questions about how feasible the math actually is. The very short answer is that there are “a TON of moving pieces,” in particular tied to free cash flow generation, that make this a tough question to answer directly, Leerink notes. The firm would assume that any transaction would likely look at either asset divestitures or real estate monetization efforts, but the latter may be tough given the sale leaseback activity that Walgreens Boots Alliance has already done. “Where there’s a will there’s a way,” and if Walgreens Boots Alliance and Sycamore want to complete a deal, they certainly can, argues Leerink. But there are a number of variables in place here that make this far from a slam dunk, the firm adds. Leerink has a Market Perform on Walgreens Boots Alliance.