CVS Health expects to complete its $8 billion acquisition of Signify Health by the end of the week.
CVS Health closes $8 billion Signify Health deal
March 29, 2023
by John R. Fischer, Senior Reporter
CVS Health Corp has clinched its $8 billion acquisition of Signify Health following months of antitrust scrutiny, moving beyond the pharmaceutical sector into other healthcare delivery arenas, including the home care market.
The company beat out competing bids in September from Amazon, UnitedHealth and Option Care Health to acquire Signify, which shifts care to home settings, saying then that it would acquire the latter for $30.50 a share in cash.
As part of the deal, Signify will remain a payor-agnostic business, said CVS Health in a statement.
“This acquisition will enhance our connection to consumers in the home and enables providers to better address patient needs as we execute our vision to redefine the healthcare experience,” said CVS Health President and CEO Karen Lynch when the deal was first announced in September.
While not directly competing with one another in any market, the U.S. Department of Justice requested more information on the deal in October, in line with the Biden administration’s initiative to crack down on large, expensive mergers and acquisitions that critics say could result in higher service prices for patients, reported Reuters.
In February, CVS said it would finance the Signify acquisition partially with bonds that would also be used for general corporate purposes, according to Seeking Alpha.
It also announced around this time the $10.6 billion acquisition of Oak Street Health (OSH), which has also received its shares of criticism.
In March, U.S. Senator Elizabeth Warren requested that the U.S. Federal Trade Commission review the deal, saying that consolidation may not yield promised benefits and telling the FTC to "challenge in court any mergers that have reduced competition in violation of antitrust laws,” according to Reuters.
OSH has 169 medical sites across 21 states that care for Medicare patients, and employs approximately 600 primary care providers. It is expected to have over 300 centers by 2026, each potentially contributing $7 million of OSH's Adjusted EBITDA at maturity. That deal is expected to close in 2023.
The company beat out competing bids in September from Amazon, UnitedHealth and Option Care Health to acquire Signify, which shifts care to home settings, saying then that it would acquire the latter for $30.50 a share in cash.
As part of the deal, Signify will remain a payor-agnostic business, said CVS Health in a statement.
“This acquisition will enhance our connection to consumers in the home and enables providers to better address patient needs as we execute our vision to redefine the healthcare experience,” said CVS Health President and CEO Karen Lynch when the deal was first announced in September.
While not directly competing with one another in any market, the U.S. Department of Justice requested more information on the deal in October, in line with the Biden administration’s initiative to crack down on large, expensive mergers and acquisitions that critics say could result in higher service prices for patients, reported Reuters.
In February, CVS said it would finance the Signify acquisition partially with bonds that would also be used for general corporate purposes, according to Seeking Alpha.
It also announced around this time the $10.6 billion acquisition of Oak Street Health (OSH), which has also received its shares of criticism.
In March, U.S. Senator Elizabeth Warren requested that the U.S. Federal Trade Commission review the deal, saying that consolidation may not yield promised benefits and telling the FTC to "challenge in court any mergers that have reduced competition in violation of antitrust laws,” according to Reuters.
OSH has 169 medical sites across 21 states that care for Medicare patients, and employs approximately 600 primary care providers. It is expected to have over 300 centers by 2026, each potentially contributing $7 million of OSH's Adjusted EBITDA at maturity. That deal is expected to close in 2023.