CVS Health to acquire Signify Health for $8B

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CVS Health announced on Monday it will acquire home health care company Signify Health, in a deal valued at about $8 billion. 

The retail pharmacy chain has entered an agreement to acquire Signify for $30.50 per share in cash.

Signify, which has a network of more than 10,000 clinicians across all 50 states, expects to connect with nearly 2.5 million unique members in the home, both in-person and virtually, in 2022. On average, Signify's clinicians spend 2.5 times longer with a patient in the home than providers spend in the average primary care office visit, according to the company.

"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 health care experience," CVS Health CEO Karen Lynch said in a statement. "In addition, this combination will strengthen our ability to expand and develop new product offerings in a multi-payor approach."

TickerSecurityLastChangeChange %
CVSCVS HEALTH CORP.99.44-0.49-0.49%
SGFYSIGNIFY HEALTH INC28.95+0.18+0.63%

The competition for Signify has been hot: In addition to CVS, UnitedHealth, Amazon and Option Care Health placed bids to acquire Signify. In July, Amazon announced a plan to acquire primary care provider One Medical for $18 per share in an all-cash deal valued at about $3.9 billion.

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CVS Health Chief Financial Officer Shawn Guertin said the acquisition is expected to be "meaningfully accretive to earnings" and that the company is "increasingly confident" about achieving its long-term adjusted earnings per share goals outlined at its investor day in December. 

TickerSecurityLastChangeChange %
UNHUNITEDHEALTH GROUP INC.516.35-7.65-1.46%
AMZNAMAZON.COM INC.127.51-0.31-0.24%
OPCHOPTION CARE HEALTH30.55-0.10-0.33%

The deal is expected to close in the first half of 2023, subject to approval by Signify shareholders, receipt of regulatory approval and satisfaction of other customary closing conditions. Private equity funds affiliated with New Mountain Capital, which owns approximately 60% of Signify's common stock, have agreed to vote the shares they own in favor of the transaction.

Signify Health CEO Kyle Armbrester will continue to lead the company following the close of the transaction.

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CVS operates more than 9,900 retail pharmacy locations and 1,100 MinuteClinic locations. The company also offers prescription drug plans for major companies through its Caremark arm and provides health insurance plans and services to an estimated 39 million people through Aetna.

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