CVS Pharmacy has purchased growing home-care company Signify Health after a tight bidding war.
Key details
CVS has beaten Amazon, Option Care, and UnitedHealth in the bidding war to purchase Signify Health, with a bid of $8 billion. The purchase is an all-cash deal for $30.50 per share.
Signify announced its acquisition plans in a Monday press release that says the transaction will close sometime in early 2023.
“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. 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,” says CVS CEO Karen S. Lynch.
Why it’s news
CVS’s successful bid signifies the growing influence of the home-care market, as more major healthcare corporations are moving into the space.
Last week, Walgreens Boot Alliance purchased a majority share of CareCentrix. UnitedHealth similarly purchased LHC Group for $5.4 billion this past spring.
Signify is a Dallas-based analytics and technology company that leverages technology and provider networks to assist with in-home care, which will plan a major role in support for home care in the coming years as the demand grows.
“[The purchase] takes the drugstore giant closer to its mission of being an integrated healthcare provider,” says Barron’s.
“Whether it’s an aging population that has mobility issues or healthier Americans who have learned to prize convenience during the pandemic, demand for care away from hospitals, nursing homes, and other institutional settings is growing.”
What’s not being said
The purchase marks another blow to Amazon’s larger plan to purchase their way into the healthcare market. The company may need to seek other options if it wants to purchase companies that will help it gain a market share.
As we reported last week, Amazon may be attempting to shift its strategy for breaking into health care by shifting, from creating original services like the recently canceled Amazon Care, to purchasing existing and growing companies. Amazon previously purchased One Medical in July for $3.9 billion and wants to continue expanding into the market.
Notable quote
“Signify Health is a leader in Health Risk Assessments, value-based care, and provider enablement. With a network of more than 10,000 clinicians across all 50 states and a nationwide value-based provider network, combined with its proprietary analytics and technology platforms, Signify Health is improving patient engagement, patient outcomes, and care coordination for stakeholders across the health care system,” says Signify’s press release.
