USA – CVS Health has reached a deal to acquire in-home healthcare company Signify Health for about US$8 billion.
CVS apparently beat out other healthcare and retail companies including Amazon and UnitedHealth Group’s Optum medical care provider business that had reportedly been interested in Signify Health or at least looked into the potential of adding the home care company.
CVS said it will pay US$30.50 a share in cash for Signify, an acquisition that would build on its growing healthcare services. Signify provides technology and analytics to help with in-home patient care.
The deal comes as competitors from Amazon to Walgreens are moving further into the healthcare sector. In July, Amazon announced it was acquiring primary-care provider One Medical for about US$3.9 billion.
Shares of Signify, which went public in February 2021, surged in late August after reports that Amazon was among the bidders.
Last month, CVS revealed plans to acquire or take a stake in a primary-care company by year’s end.
In buying Signify Health, CVS Health will add to its growing menu of healthcare services that includes more than 9,000 retail drugstores, and 1,100 MinuteClinics where customers can get vaccines or urgent care.
CVS called Signify Health a leader in “health risk assessments” with a network of more than 10,000 clinicians across all 50 states.
“Signify Health’s network of clinicians —physicians, nurse practitioners, and physician assistants — utilize home-based visits to identify a patient’s clinical and social needs, and then connect them to appropriate follow-up care and community-based resources in order for the patient to have a more connected, effective care experience,” CVS said.
The Signify deal follows other acquisitions and shifts into primary health care. CVS previously acquired pharmacy benefits manager Caremark, and the nation’s third-largest health insurer, Aetna.
It recently introduced therapy for mental health at some stores. The effort to add a home care provider was a key part of CVS Health’s plan to bolster its healthcare and technology platform this year.
“Signify Health will play a critical role in advancing our health care services strategy and gives us a platform to accelerate our growth in value-based care,” said CVS Health President and CEO Karen S. Lynch.
The companies expect the acquisition, which is subject to regulatory approval, to close in the first half of next year.
Private equity firm New Mountain Capital owns about 60% of Signify’s common stock and agreed to support the deal, the companies said.
CVS’s announcement comes less than a week after rival Walgreens Boots Alliance announced a US$330 million majority stake investment in post-acute and home care company CareCentrix.
According to Walgreens, the US$330 million CareCentrix investment is for a 55% initial stake with the option to increase the stake in the future.
Such deals are further evidence that retail healthcare providers such as CVS, Walgreens, Walmart, and Amazon are looking to expand their outpatient services to meet the needs of American consumers.
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