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09/08/2022

CVS Health to Acquire Signify Health in $8B Deal

Acquisition advances long-term strategy by providing platform for growth in value-based care
Marian Zboraj
Digital Editor
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CVS Health
CVS will work with Signify Health in building an integrated experience that supports a more proactive, preventive and holistic approach to patient care.

Leading the transformation to value-based care, CVS Health and Signify Health have entered into a definitive agreement under which CVS Health will acquire Signify Health for $30.50 per share in cash, representing a total transaction value of approximately $8 billion.

Signify Health is considered 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. Its clinicians and providers can have an even greater impact by engaging with CVS Health's unique collection of assets and connecting patients to care how and when they need it.

"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 CVS Health President and CEO Karen S. Lynch. "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's network of clinicians -- physicians, nurse practitioners and physician assistants -- use home-based visits to identify a patient's clinical and social needs, and then connect them to appropriate follow-up care and community-based resources so that the patient can have a more connected, effective care experience. In 2022, Signify Health's clinicians expect to connect with nearly 2.5 million unique members in the home, both in-person and virtually, and on average they spend 2.5 times longer with a patient in the home than providers spend in the average primary care office visit.

Signify Health recently revealed that its accountable care organizations (ACOs) generated more than $138 million in gross savings in 2021, and in 2023 its Caravan business (which it acquired in March 2022) is expected to serve ACOs representing more than 700,000 people, rivaling many stand-alone platforms. As part of CVS Health, Signify Health will continue to advance its extensive primary care enablement capabilities, including turnkey analytics, network and practice improvement solutions, to help providers transition to value-based reimbursement and improve quality of care.

"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 Dallas-based Signify Health. "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. We are both building an integrated experience that supports a more proactive, preventive and holistic approach to patient care, and I look forward to executing on our shared vision for the future of care delivery."

CVS Health and Signify Health anticipate that the transaction will close in the first half of 2023. Following the close, Armbrester will continue to lead Signify Health as part of CVS Health. 

"This is a major step as we continue to execute on our strategy," said CVS Health EVP and CFO Shawn Guertin. "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."

Revenue growth among all of its business segments recently helped CVS Health achieve strong a second-quarter performance and prompted the company to raise its full-year guidance. For the three months ended June 30, CVS saw total revenues increase to $80.6 billion, up 11% from the second quarter of 2021.

Meanwhile, Walmart is also stepping up its health care access by entering into a wide-ranging 10-year partnership withUnitedHealth Group. Beginning in January, the two companies will roll out a co-branded Medicare Advantage plan in Georgia, and also offer Walmart Health Virtual Care as an in-network option for commercial members in UnitedHealthcare’s Choice Plus PPO plan.

With its CVS Pharmacy subsidiary operating almost 10,000 locations nationwide, Woonsocket, R.I.-based CVS Health is No. 7 on The PG 100, Progressive Grocer’s 2022 list of the top food and consumables retailers in North America. Bentonville, Ark.-based Walmart U.S. is No. 1 on The PG 100.

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