Summary
Cencora, Inc. (formerly AmerisourceBergen Corporation) filed an 8-K on November 10, 2022, detailing two significant transactions involving Walgreens Boots Alliance Holdings LLC. The company directly repurchased approximately 3.23 million shares of its common stock from Walgreens for $500 million, at a price of $154.60 per share. These repurchased shares will be held in treasury. Concurrently, Walgreens completed a secondary public offering of 10 million shares of Cencora's common stock, in which Cencora did not participate and received no proceeds. These events are important for investors to understand the company's capital allocation strategy and the evolving relationship with a significant former shareholder.
Key Highlights
- 1Cencora (formerly AmerisourceBergen) repurchased 3,234,153 shares of its common stock directly from Walgreens Boots Alliance Holdings LLC.
- 2The share repurchase agreement was executed on November 6, 2022, with the transaction completed on November 10, 2022.
- 3The total cost of the share repurchase was approximately $500 million, with shares bought back at $154.60 each.
- 4The repurchased shares will be held in treasury by Cencora.
- 5Walgreens Boots Alliance Holdings LLC also completed a separate secondary public offering of 10 million shares of Cencora's common stock.
- 6Cencora did not sell any shares in the secondary offering and received no proceeds from it.
- 7The company entered into an underwriting agreement with Walgreens and Morgan Stanley & Co. LLC for the secondary offering.
Frequently Asked Questions
The share repurchase was made under the Company's existing share repurchase program, indicating a capital allocation decision to return value to shareholders or manage its outstanding share count.
No, Cencora did not sell any shares in the secondary offering and therefore did not receive any proceeds from it. The proceeds from the sale of 10 million shares went to Walgreens Boots Alliance Holdings LLC.
The repurchase price of $154.60 per share was set to be equal to the price at which the Underwriter purchased shares from the Selling Stockholder (Walgreens) in the secondary offering, net of underwriting discounts and commissions.
This indicates a strategic move by Cencora to buy back shares from a significant former stakeholder, potentially simplifying its shareholder structure and demonstrating confidence in its own valuation. It also marks the completion of Walgreens' divestment of its remaining stake in Cencora.