By George Anderson
Duane Reade is New York's drugstore and the 239-store chain now has a new owner.
It was announced yesterday that Duane Reade's board of directors voted in favor of selling the business to the private equity firm, Oak Hill Capital Partners, for approximately $415 million in cash and debt repayments for around another $300 million.
Oak Hill plans to take the drugstore chain, which has been listed on the New York Stock Exchange, private.
Duane Read Chairman, Chief Executive and President will continue in those roles once the deal is completed.
"We are confident that this agreement delivers excellent value to our stockholders while allowing us to effectively confront near-term industry challenges by affording us a degree of flexibility that we would not have as a public company," he said in a released statement. "We believe the partnership with Oak Hill will provide an opportunity to investigate new avenues to improve the business, while maintaining our leadership position in the metro New York market. Our customers, employees and business associates should be assured that this will be a seamless transaction."
Moderator's Comment: What are your thoughts on the Duane Reade deal? Will this influence a possible deal for the Eckerd drugstore chain?
Duane Reade can only be helped by this deal. The chain has lost some of its focus in recent years as it tries to meet the quarterly expectations of analysts. Now, Anthony Cuti and company, with the aid of Robert Bass's millions, can focus on running the business for the long haul.
We saw in several reports on this story that analysts believe this deal will increase the likelihood that Eckerd will be sold. Frankly, we do not see it. The only way it might have some connection would be if Mr. Bass was interested in acquiring Eckerd as well. [George Anderson - Moderator]