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Drugstore.com, the Bellevue online drugstore that survived the dot-com bust to become one of the leading online distributors of drugs, vitamins and beauty products, has agreed to be purchased by Walgreens for $429 million. The purchase price represents a whopping 102 percent premium over the company’s 30-day average closing stock price.

“Our acquisition of drugstore.com today significantly accelerates our online strategy to leverage the best community store network in America by becoming the most convenient choice for health and daily living needs whether customers shop online or in our stores,” said Walgreens President and CEO Greg Wasson in a press release. The enterprise value of the deal was set at $409 million, with an equity value of $429 million.

Led by CEO Dawn Lepore, drugstore.com boasts more than 3 million customers. “Our growth strategies are perfectly aligned, and Walgreens will be able to accelerate and expand the investments necessary to achieve our vision and growth opportunities,” Lepore said in the press release.

It marks the latest big acquisition in Seattle’s technology industry, following news earlier this month that AT&T planned to buy Bellevue-based T-Mobile USA for $39 billion.

Drugstore.com, which employs 1,000 people, posted sales of $456 million last year. Walgreens, with 7,689 stores in the U.S. and sales of $67 billion last year, said it plans to keep drugstore.com’s operations in Bellevue and maintain the company’s brand.

Interestingly, Amazon.com was considered a potential acquirer of drugstore.com, in part because the Seattle online retailer maintained an ownership stake from a legacy investment it made in the company in 1999. At the time of that deal, Amazon.com owned 40 percent of the company, a share which has diminished over time to 12 percent.

Seattle angel investor Geoff Entress serves as Amazon.com’s designee on the drugstore.com board.

Though not as closely tied as they once were, the two companies remain linked. In 2009, drugstore.com entered into a 3-year deal with Amazon.com to sell over-the-counter products through Amazon.com’s marketplace. It also has a deal to sell items from its Beauty.com unit through Amazon. Those deals accounted for $10.8 million of drugstore.com’s $456 million in sales last year.

Founded in 1998, drugstore.com attracted high-profile backers and board members. Once led by Microsoft executive Peter Neupert, the company’s board at one time included Melinda Gates, Howard Schultz and Jeff Bezos. Its biggest venture backer was Kleiner Perkins Caufield & Byers, the Silicon Valley firm which at the time of today’s sale to Walgreens owned about nine percent of the outstanding stock.

Drugstore.com went public in 1999, finishing its first day of trading at $54.25 and peaking just a few weeks later at $67.50. But shares tanked amid the dot-com bust, and while the company survived those tough times it never got back to the IPO valuation.

Walgreens is paying $3.80 in cash for drugstore.com, a huge premium over the past few weeks of trading. But those who bought into the company shortly after the IPO more than a decade ago certainly lost their shirts.

John Cook is co-founder of GeekWire. Follow on Twitter: @geekwirenews.

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