Walgreens will purchase 1,932 Rite Aid stores (NYSE: RAD) and has already acquired the first 97 with the rest of the store transfers to be completed by spring of next year. Valuing at almost $4.4 billion, Rite Aid reported net income of $170.6 million which is up from $14.8 million the same quarter last year. September quarter sales reached $7.7 billion which was down from a little more than $8 billion a year prior. The company aims to use sale proceeds to pay down debt and is likely to record a taxable gain on this acquisition. Most of the stores that Walgreens had purchased are located in the southeast of the U.S. that will lead to the closing of Rite Aid stores located in the East and West coasts. Walgreens on the other hand is looking to close Rite Aid stores that are located closely around existing Walgreen stores. Last year, Rite Aid entered this deal with more than 4,500 stores and annual revenue of about $30.7 billion.
"Successfully completing the pilot closing and first subsequent closings marks an important step in realizing the full benefits of this transaction," said Rite Aid Chairman and CEO John Standley. "I am proud of the entire Rite Aid team for their commitment and dedication to helping us reach this milestone. I also want to thank our team for their continued support as we complete the transfer process over the next several months and implement our plans to deliver improved results."