CVS to Acquire Home Health Provider Signify Health for $8B
After winning a bidding war, CVS will buy Signify Health in an all-cash transaction, gaining access to its nationwide clinician network and analytics solutions focused on home-based care.
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By Anuja Vaidya
- Update: On March 29, CVS Health completed its acquisition of Signify Health, paying approximately $8 billion. The news comes soon after CVS announced plans to buy Oak Street Health for $10.6 billion, further expanding its healthcare footprint.
CVS Health plans to purchase home healthcare company Signify Health in a deal valuing approximately $8 billion.
Rumors of a potential deal surfaced early last month when the Wall Street Journal reported that CVS Health was going to make a bid for the company, sending Signify Health's stock soaring. It then emerged that CVS was competing against UnitedHealth Group, Amazon, and Option Care Health, among others, for the company. According to Bloomberg, as of Aug. 22, UnitedHealth Group had submitted the highest bid for Signify Health, followed closely by Amazon.
But CVS Health won, making a deal to buy the company for $30.50 per share in cash.
Signify Health includes a network of more than 10,000 clinicians nationwide that determine patients' clinical and social needs through home-based visits, connecting them to follow-up care and community-based resources to meet those needs. It also offers analytics solutions to help healthcare organizations establish and grow value-based payment programs and drive care into the home.
"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 Karen S. Lynch, president and CEO of CVS Health, in the press release. "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. In addition, this combination will strengthen our ability to expand and develop new product offerings in a multi-payor approach."
Signify Health has an established relationship with 50 health plan clients and their members, advancing CVS' ability to offer payer-agnostic solutions, the press release noted.
Further, after closing its Episodes of Care Services segment earlier this summer, Signify Health said it would focus on its Home and Community Services business and acquisition of Caravan Health, a company that supports the population health management and value-based payment programs of accountable care organizations (ACOs).
Next year, the Caravan business is expected to support ACOs that represent more than 700,000 people, which will bolster CVS' efforts to help providers transition to value-based reimbursement and improve care quality, according to the press release.
"Signify Health's mission is to build trusted relationships to make people healthier by using actionable intelligence to understand what's really impacting outcomes and cost today," said Kyle Armbrester, CEO of Signify Health, in the press release. "As we carefully considered our long-term strategic options, we determined that CVS Health is the ideal partner, given its focus on expanding access to health services and helping consumers navigate to the best sites of care."
Armbrester will continue to lead Signify Health as part of CVS Health once the transaction has closed.
