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A sign outside a store of pharmacy and cosmetics chain Boots is seen in London, in this May 16, 2011 file photo. Drug retailer Walgreen Co is buying a 45 percent stake in the European health and beauty group alliance Boots for $6.7 billion in cash and stock, creating the world's biggest buyer of prescription drugs.


Canada Pension Plan Investment Board's decision to put money into U.K. pharmacy chain Alliance Boots in 2008, in the depths of the financial crisis, paid off big time this week.

U.S. pharmacy chain Walgreen bought 45 per cent of Alliance Boots at a valuation that surely means a huge win for CPPIB. It's hard to tell just how big, as CPPIB has been quiet about what it paid, but the timeline gives a clue.

U.S. buyout firm KKR invested in Boots in 2007, in one of the last big buyouts of the boom years. And even so, even with the purchase made at the top of the bubble, KKR is looking at a gain of more than two times its money based on the valuation in the Walgreen deal.

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CPPIB bought its stake in 2008, when markets had been hammered, and the cash-rich Canadian pension fund was able to pony up for transactions when others were unable to do so, leaving little competition. It's unlikely CPPIB paid as much as KKR. So that implies that CPPIB has done even better on its investment.

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