Fred’s, Inc. has announced that Walgreens will acquire pharmacy patient prescription files and related pharmacy inventory of 185 Fred’s stores located across 10 Southeastern states.

Under the agreement, the aggregate consideration to be paid by Walgreens to Fred’s is $165 million, subject to adjustment, plus an amount equal to the value of related pharmacy inventory.

The transaction is part of a previously-announced plan by Fred’s to unlock shareholder value by monetizing non-core assets through strategic transactions. Fred’s will continue to operate its retail stores at most of these locations after the pharmacies close. Once the transaction is complete, Fred’s will continue to operate approximately 162 pharmacies across its nearly 600 stores. The transaction will help Fred’s take a major step toward eliminating its debt balance.

Walgreens operates approximately 9,800 drugstores with a presence in all 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands, along with its omnichannel business, Walgreens.com.

PJ SOLOMON is acting as exclusive financial advisor to Fred’s on the transaction.