CVS enters $8B agreement to acquire Signify Health
After previously expressing an intent to expand into primary care services, CVS Health announced on Monday that the company will acquire Signify Health at $30.50 per share, for a total cost of approximately $8 billion.
The move will allow CVS Health to leverage Signify’s healthcare platform—including a nationwide network of 10,000 healthcare providers and comprehensive analytics—as the company attempts to grow its capabilities to provide “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 healthcare experience. In addition, this combination will strengthen our ability to expand and develop new product offerings in a multi-payor approach," CVS Health President and CEO Karen S. Lynch said in the CVS Health announcement of the acquisition.
Prior to closing, the transaction must gain approval by a majority of Signify Health’s stockholders, which is widely expected. Additionally, the deal must gain regulatory approval and satisfy other customary closing conditions. The companies state that they anticipate that the transaction will close in the first half of 2023.
"This is a major step as we continue to execute on our strategy," CVS Health Executive Vice President and Chief Financial Officer Shawn Guertin said. "We expect the acquisition to be meaningfully accretive to earnings and, as a result, are increasingly confident we can achieve our long-term adjusted EPS goals as outlined at our Investor Day in December 2021."
The home healthcare sector has been deemed attractive by multiple industry players, with the Wall Street Journal reporting that Amazon was also among the bidders for Signify Health.
CVS Health also has a hand in the insurance space after acquiring Aetna—one of the largest insurance companies in the U.S.—in 2018. Aetna currently services an estimated 39 million people, according to the company’s website.