CVS to take Signify Health for $8 billion

by Thomas Dworetzky, Contributing Reporter | September 07, 2022
Business Affairs
CVS Health has made a deal to buy Signify Health for about $8 billion, the companies said Monday.

The acquisition has CVS paying $30.50 a share in cash for the home healthcare services firm. It beat out competing bids from others, including UnitedHealth, Amazon and Option Care Health, according to CNBC and others.

CVS chief financial officer Shawn Guertin described the acquisition as “an anchor asset” on an investor call Tuesday, a move that will let the retailer move beyond its drugstore roots into other healthcare delivery arenas.

“We could not be more pleased to have Signify be the first step on our journey to build a differentiated health services organization to transform how care is delivered,” he said on the call.

The move is part of a shifting tide in healthcare, as other giants such as Amazon and Walgreens are doing deals to move into healthcare delivery.

In July, Amazon made a $3.9 billion deal for One Medical, the concierge doctor chain, which is now under FTC review. And Walgreens has partnered, and is a majority stake holder, with primary-care deliverer VillageMD to build hundreds of physician offices next to drugstores.

The One Medical deal will give Amazon access to physical health clinics and "payer and hospital system relationships," Evercore ISI analyst Elizabeth Anderson said in July, according to an HCB News report at the time.

Now CVS has countered. “Signify Health will play a critical role in advancing our healthcare services strategy, and gives us a platform to accelerate our growth in value-based care,” CVS Health president and CEO Karen S. Lynch said 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. In addition, this combination will strengthen our ability to expand and develop new product offerings in a multi-payor approach.”

CVS had already been adding healthcare services prior to this latest deal. It had previously done acquisitions of Aetna and pharmacy benefits manager Caremark. And its MinuteClinics provide shots and urgent care inside stores — even adding mental health therapy in some spots, according to CNBC.

And in mid-2021 CVS-owned Aetna began Aetna Virtual Primary Care, connecting eligible Aetna members with physicians both remotely and in person. “A member selects a virtual care provider,” CVS Health spokesperson Ethan Slavin told HCB News at the time.

Then, “a continuous relationship with a virtual care physician is built beginning from the first 30–45-minute comprehensive primary care visit and extending to every primary care visit thereafter.”

The latest deal takes it a step further and will add house calls to the CVS mix.

“There’s a renaissance going on with the house call and we’re really pushing it across the market and making a real impact in individuals' lives,” CEO Kyle Armbrester said on the call.

The deal is slated to close in early to mid-2023.

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