September 12, 2022:- According to an article by Rebecca Pifer in HealthcareDive, CVS stated Monday it decided to acquire Signify for $30.50 a share in an all-cash agreement that the healthcare company expects to complete in the first half of 2023. CFO Shawn Guertin expressed that the acquisition should be “meaningfully” accretive to CVS’ earnings.
Recently, the Wall Street Journal reported that CVS was the frontrunner in accession talks for Signify, which included other heavy players like Amazon, fresh off the announcement that it intends to acquire primary care network One Medical in July.
CVS is spending a premium for Signify, which has seen its value balloon since reports emerged in August; the company was seeking a sale, sending its shares jumping from $17.15 on Aug. 1 to $28.77 on Friday’s closing.
Signify went public in February 2021, boosting more than $500 million. The company’s network of clinicians meets patients in their homes to specify their medical and social needs, then connects them with any required follow-up services. According to a disclaimer, signify has expanded to serve more than 2.5 million homes, creating a helpful referral stream to other CVS services.
With the Signify acquisition, CVS also obtains accountable care organization Caravan Health, which Signify acquired in March. Caravan presently partners with more than 170 providers in Medicare accountable care institutions, representing more than 700,000 people.
CVS has become a huge vertically integrated medical service provider since it acquired health insurer Aetna in 2018 for $69 billion. Since then, CVS has grown its network of urgent care clinics and pharmacies and built its existence in home health and primary care as customers increasingly seek low-cost care in their communities.
In a message, CVS CEO Karen Lynch said the addition of Signify will help CVS play a “vital role” in advancing its healthcare services strategy, evolution in value-based care, and new product offerings for other payers. Signify presently has more than 50 health plan clients.
It’s the most delinquent big-ticket deal for a home health company. Last week, Walgreens completed its $330 million acquisition of a preponderance stake in the home healthcare platform CareCentrix. In comparison, UnitedHealth agreed to buy home health firm LHC Group for $5.4 billion this spring, and Humana obtained home healthcare business Kindred at Home last year for $5.7 billion.
Signify CEO Kyle Aembrester will persist to lead the company in CVS after the close of the transaction.