Walgreens Creates New Health and Wellness Division as Part of Strategic Move to Expand Health Care Access beyond Retail Sites

Business Wire, March 17, 2008

* Company also announces acquisition of two leading providers of worksite health centers, giving Walgreens more than 500 retail clinics and health centers

* New division will manage health centers and pharmacies at company worksites, while continuing nationwide rollout of Take Care Health Clinics at Walgreens stores

* Large-company employees, health plan members and their dependents will seamlessly access health centers and pharmacies through Walgreens drugstores and employer worksites

* New patient-centered offerings will lower costs, improve outcomes and enhance Walgreens relationships with employers and health plans

DEERFIELD, Ill. -- To provide patients with greater access to quality, affordable and convenient health care near their homes and at work, Walgreen Co. (NYSE:WAG) (NASDAQ:WAG) has created a new Walgreens Health and Wellness division. The division will manage health centers and pharmacies at large-company worksites, while continuing the rollout of Take Care Health Clinics located at Walgreens drugstores nationwide.

As part of the new division's strategy, Walgreens also announced plans to acquire two leading operators of worksite health centers, I-trax, Inc. (AMEX: DMX) of Chadds Ford, Penn., parent company of CHD Meridian Healthcare, LLC, and privately held Whole Health Management of Cleveland. Upon closing of the transactions, Walgreens will have more than 500 worksite and retail health centers in 40 states, including its Take Care Health Clinics.

Walgreens estimates the current potential market for worksite health centers and pharmacies includes more than 7,600 corporate campuses of 1,000 employees or more.

Walgreens will acquire I-trax in an approximately $278 million cash transaction, including the assumption of about $18.3 million in net debt. An affiliate of Walgreens will commence a tender offer within 10 business days for all outstanding common stock of I-trax at $5.40 per share.

Terms of Whole Health Management's acquisition by Walgreens weren't disclosed. Both acquisitions are expected to close within 60 days, subject to certain regulatory approvals.

"These announcements mark an important strategic initiative for us," said Walgreens Chairman and CEO Jeffrey A. Rein. "Walgreens Health and Wellness division will marry our store clinics and pharmacies with worksite health centers and pharmacies. Our unique offering will allow large employers and health plans to provide care to employees and plan members at their worksites, and to dependents and retirees through our Take Care Health Clinics at local Walgreens drugstores. Over the last 15 years we've become more convenient for the customer with our 'Main and Main' drugstore locations. Today, we're redefining 'Main and Main' to include the worksite and bring us that much closer to customers.

"The story here is growth, and as these two companies increase their offerings, we can expand our complementary services more quickly and to a larger market. I-trax and Whole Health also will open the door for us to add worksite pharmacies where they already operate health centers. This is a natural extension of the existing worksite pharmacy services we currently provide for companies such as Sprint, ABX Air and Toyota.

"In addition to providing cost-effective primary and acute care, this new delivery system focuses on disease prevention, identification and intervention. Quality, convenience, affordability and choice will be the hallmarks of our Health and Wellness division. It will address chronic diseases, which account for about 75 percent of today's health care spending, in new ways that bring together a wide spectrum of health care providers and blend the latest electronic medical records, or EMR, technology with face-to-face care to improve outcomes. Our EMRs encourage continuity of care and play a key part in connecting patients to their medical home."

Hal F. Rosenbluth, senior strategy consultant for health care at Walgreens and co-founder and chairman of Take Care Health Systems, will be president of the new division. Rosenbluth has 29 years of experience in the business-to-business sector as founder of Rosenbluth International (RI), a global travel management company. Through a series of acquisitions, he built RI into a $3 billion business with 4,300 employees operating in 15 countries before selling the company to American Express in 2003. The following year, he co-founded Take Care Health Systems, which opened its first convenient care clinic in November 2005 and was acquired by Walgreens in 2007.

I-trax, through its subsidiaries CHD Meridian Healthcare and ProFitness Health Solutions, currently provides worksite health services, including primary and acute care, wellness, pharmacy and disease management services and health and fitness programming, for more than 160 employers including BMW, Eastman Chemical, Horizon Blue Cross Blue Shield of New Jersey, Lowe's and Toyota. I-trax reported $143 million in revenue in 2007.

Frank A. Martin, Chairman of I-trax, said, "This merger will create even greater opportunities for employers to help their employees better manage their health. With Walgreens growing network of convenient care clinics, pharmacy services and our list of nearly 300 sites, we will be able to offer improved access to high-quality care and services to all of an employer's population - whether at the worksite or through other convenient channels in the community."