The news: Walgreens Boots Alliance will be spun out into five standalone companies following its official sale to private equity firm Sycamore Partners.

The five separate entities will be:

• Walgreens
• Shields Health Solutions (specialty pharmacy)
• CareCentrix (home health)
• VillageMD (primary care)
• The Boots Group (Walgreens’ international health and beauty retail chain)

Zooming in: Walgreens appointed Mike Motz as its next CEO. Motz was previously CEO of Staples US Retail, a Sycamore portfolio company. He also served as president of Shoppers Drug Mart, a pharmacy chain in Canada.

Why it matters: Sycamore will likely make retail pharmacy a core priority, despite ongoing headwinds in the sector.

Walgreens’ pharmacy business is Sycamore’s most successful entity ($100B in 2024 prescription drug revenues) in the biggest market it operates in. Motz is a retail veteran with pharmacy leadership experience, and his hiring signals that Sycamore is keen on getting Walgreens to deliver a better pharmacy customer experience while improving front–of-store drugstore sales.

Additionally, the new organizational structure indicates that Sycamore will shop around some of its non-core assets since there are more operational complexities with spinning off parts of an integrated company. VillageMD is the likeliest deal candidate due to its poor financial performance, even if a sale will only return a fraction of the $6 billion-plus Walgreens invested in the primary care provider.