Walgreen Co. of Deerfield, Ill., will purchase Pine Bluff-based Stephen L. LaFrance Pharmacy Inc., the operator of USA Drug and Super D Drug among others, in a $438 million deal that is expected to be finalized by Sept. 1, it was announced Thursday morning.
Stephen LaFrance, chairman and owner of Stephen LaFrance Holdings Inc., said that he decided to sell the business that he founded in 1968 so that he would have more time to spend with his family.
“I am 70 years old,” LaFrance said from his office in Pine Bluff Thursday afternoon. “I have three children and seven grandchildren. My wife and I have been married for 44 years. I’m going to take care of our family.”
LaFrance said that it was not an easy decision to make.
“This company is my baby,” LaFrance said. “I started it from scratch. I’m going to miss it terribly,” LaFrance said.
LaFrance said that Walgreens is a good fit for the LaFrance chain of stores.
“I think what they liked most about us is how loyal our customers are to us and how we treat them,” LaFrance said. “It is all about customer service for us. I don’t use that term lightly. The Walgreen management has said that they will run our stores as a separate chain. They are a fine company. They are gentlemen and fair and I have nothing but high praise for them. I had nothing but high praise for them when I competed with them.”
Walgreens President and CEO Greg Wasson said in a press release Thursday that the purchase will give his company an expanded presence in the mid-South.
“It will provide significant new pharmacy business for us in this region while also enabling us to bring the Walgreens experience to many additional smaller communities where USA Drug has developed strong operational expertise,” Wasson said.
LaFrance said that the steps towards closing the deal with Walgreens include a meshing of operational systems and giving Walgreens time to understand how his company runs its business, including visits with district managers and store managers.
The deal is also subject to regulatory requirements.
“In 1968 I had a little pharmacy department that I leased in the Gibson Department Store at 10th Avenue and Main Street here in Pine Bluff,” LaFrance said. “We started USA Drug in Pine Bluff in the 1980s, with the first store in Broadmoor and the second on 28th.”
Baylor Guy, vice president for human resources with LaFrance Holdings, said that the company’s pharmacies will continue to operate as they did prior to the Thursday sale announcement.
“Our plan of operation moving forward is that it’s business as usual,” Guy said. “We’re excited about the opportunities moving forward partnering with Walgreens.”
Joe Courtright, president and CEO of USA Drug, sent a memo to all employees shortly after Walgreen Co. announced that it would be purchasing the drug store chain.
“An agreement has been reached to sell all of our stores — USA Drug, Super D Drug, May’s Drug, Med-X and Drug Warehouse — as well as our distribution center and wholesale and private brand businesses to Walgreens,” Courtright wrote in the memo.
“As we put our businesses together after the transaction closes, it is possible that decisions will be made about job reductions and store closings. We will provide advance notice and severance benefits to those whose jobs are affected by the transaction. These individuals will also be eligible to be rehired as openings occur. But remember, nothing will happen until the closing around Sept. 1 and we will maintain open channels of communication,” he said.
LaFrance managed pharmacies in the Gibson Department Store as well as the Magic Mart store on West 28th Avenue from the late 1960s until the mid-1970s.
LaFrance formed SAJ Distributors in the mid-1970s, a full-service wholesale distribution company located in Pine Bluff.
In October 1997, LaFrance formed a family owned and operated corporation, Stephen LaFrance Pharmacy Inc., to purchase all of the stores operating under the various names.
LaFrance led USA Drug’s acquistion of May’s Drug Stores Inc. and Med-X Corp. in Tulsa, Okla., in the summer of 2004.
According to Guy, as of Thursday’s announcement, the drug store chain included 144 sites across eight states including Arkansas, Kansas, Mississippi, Missouri, New Jersey, Oklahoma, New Jersey and Tennessee.
Guy said that the total number of employees is 3,133, with approximately 1,374 in Arkansas and 500 in Jefferson County.
Guy said that there are four USA Drug locations in Jefferson County and a total of 47 stores, two corporate offices and a distribution center in Arkansas.
Walgreens is the nation’s largest drug chain and last year had sales of $72 billion. It operates 7,890 drug stores in all 50 states, the District of Columbia and Puerto Rico.
USA Drug and the other drugstores in the chain recorded sales of $825 million last year, according to a Walgreens news release.
Michael Polzin, spokesman for Walgreens, said he did not know if Walgreens would begin accepting customers with military insurance, known as TRICARE, after the purchase of USA Drug is completed.
Walgreens accepted TRICARE insurance until Jan. 1. USA Drug currently accepts the military insurance.
He expects USA Drug to continue honoring TRICARE until Sept. 1, but no final decision has been made on whether the stores will continue accepting the insurance after the sale is finalized.
The USA Drug stores will remain open at their current locations until at least Sept. 1 but no decisions had been made on whether those stores will remain open after that or how many employees will be hired by Walgreens, Polzin said.