On Monday, CVS Health Corp., the owner of pharmacies, announced plans to pay $8 billion for the home healthcare company Signify Health.
According to CVS, Signify employs more than 10,000 people nationwide, including doctors and nurses, and provides technological platforms.
In a statement announcing the purchase, CVS CEO Karen Lynch said: “This acquisition will expand our relationship to customers in the home and allows clinicians to better meet patient needs as we execute our mission to reinvent the health care experience.”
The purchase would support CVS’s ongoing efforts to expand beyond its origins as a pharmacy-chain company into other facets of the health business.
The Woonsocket, Rhode Island-based business paid $69 billion to acquire health insurer Aetna in 2018.
For Signify, CVS will pay $30.50 in cash per share. The acquisition, which has a stock value of $7.6 billion, is valued at $8 billion overall when debt, equity appreciation rights, and other variables are taken into account, according to a CVS presentation.
Following the news, shares of Signify Health increased by 0.4%, while those of CVS fell by 0.3%, in accordance with the general market decline that has followed the Labor Day vacation.
Additionally, CVS will acquire Caravan Health, which Signify had already committed to purchase. Caravan collaborates with accountable-care organisations, which are networks of medical facilities, practitioners, and other service providers that provide Medicare services.
The transaction is pending regulatory clearance and a shareholder vote at Signify. According to CVS, private equity firms connected to New Mountain Capital, which holds around 60% of the stock in Signify, have consented to vote their shares in favour of the transaction.
The firms said that they anticipate the transaction to completion in the first half of 2019.
As it adapted to shifting consumer requirements, CVS Health announced in November 2021 that it would be shutting around 300 shops annually over the next three years.
In order to secure its survival, analysts at the time remarked that the retail behemoth would need to invest in both its retail sites and health care services.