CVS beats Amazon and rivals for Signify Health with $8 billion winning bid

CVS Health will acquire homecare company Signify Health for $8 billion as retail pharmacies add more primary care and home medical services.

CVS has apparently beaten out other healthcare and retail companies, including Amazon and UnitedHealth Group’s healthcare provider business Optum, who have reportedly been interested in Signify Health or at least have considered signing up. add the home care company.

But CVS announced Monday afternoon that the pharma giant has “entered into a definitive agreement under which CVS Health will acquire Signify Health for $30.50 per share in cash, representing a total transaction value of approximately $8 billions of dollars”.

By purchasing Signify Health, CVS Health will add to its growing menu of health services that includes more than 8,000 retail pharmacies, 1,100 MinuteClinics staffed by nurse practitioners, and the nation’s third-largest health insurer, Aetna.

CVS has called Signify Health a leader in “health risk assessments” with a network of more than 10,000 clinicians in all 50 states. “Signify Health’s network of clinicians, nurse practitioners, and physician assistants use home visits to identify a patient’s clinical and social needs, then connect them to appropriate aftercare and community resources so that the patient has a more connected and efficient care experience,” CVS said in announcing the purchase.

The effort to add a home care provider was a key part of CVS Health’s plan to strengthen its healthcare and technology platform this year.

“Signify Health will play a critical role in advancing our healthcare services strategy and provide us with a platform to accelerate our growth in value-based care,” said Karen S. Lynch, President and CEO. general of CVS Health. “This acquisition will enhance our connection with consumers in the home and enable providers to better meet patient needs as we execute on our vision to redefine the healthcare experience. Additionally, this combination will strengthen our ability to expand and develop new product offerings in a multi-payer approach. »

The highly anticipated CVS announcement comes less than a week after rival Walgreens Boots Alliance announced it had completed its $330 million majority investment in post-acute and home care company CareCentrix. CareCentrix’s $330 million investment is for an initial 55% stake with an option to increase stake in the future, Walgreens said.

Such agreements are additional signs that retail healthcare providers like CVS, Walgreens, Walmart and Amazon are looking to better meet the outpatient needs of American consumers. In 2022, Signify Health clinicians “expect to connect with nearly 2.5 million unique members at home, both in-person and virtually,” Signify and CVS said in a statement Monday.

“Signify Health’s mission is to build trusted relationships to improve people’s health by using actionable intelligence to understand what really impacts outcomes and costs today,” said the CEO of Signify Health, Kyle Armbrester. “As we carefully considered our long-term strategic options, we determined that CVS Health was the ideal partner, given its goal of expanding access to healthcare services and helping consumers navigate to the best We are both building an integrated experience that supports a more proactive, preventative and holistic approach to patient care, and I look forward to implementing our shared vision for the future of care delivery.

The companies said they expect the acquisition to close in the first half of next year. “We expect the acquisition to be significantly accretive to earnings and, therefore, we are increasingly confident that we can achieve our long-term Adjusted EPS objectives, as indicated during our Investor Day in December 2021,” “This is a major milestone as we continue to execute on our strategy,” said CVS Health Chief Financial Officer Shawn Guertin.

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