Fred’s said it has reached a definitive agreement to sell certain assets of EntrustRx, its specialty pharmacy unit, to a subsidiary of CVS Health Corporation.
CVS will acquire the pharmacy unit for $40 million, plus an amount equal to the value of the inventory of EntrustRx. The transaction is expected to close by the end of May 2018, subject to certain customary closing conditions.
Joe Anto, Fred’s interim CEO, said, “One of Fred’s top priorities for 2018 has been to monetize non-core assets and we are pleased to have reached an agreement for the sale of EntrustRx. The cash proceeds will allow us to pay down a significant portion of our debt and also be used for general corporate purposes.”
During the fourth quarter of 2017, Fred’s board of directors approved a plan to actively market its specialty pharmacy business for sale as part of the retailer’s turnaround plan. As a result of the decision, Fred’s reclassified the specialty pharmacy business from continuing operations to discontinued operations.
Fred’s operates approximately 600 general merchandise and pharmacy stores, including 13 franchised locations, and three specialty pharmacy-only locations.