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CVS Health acquired Signify Health, beating Amazon, UnitedHealth Group and others, in the acquisition of the home health platform.
CVS has entered into a definitive agreement to acquire Signify Health for $ 30.50 per share in cash, for a total transaction value of approximately $ 8 billion, CVS announced on Monday.
Signify was reportedly up for auction, with board members holding a Labor Day meeting to discuss the bids.
Kyle Armbrester, CEO of Signify Health, said in a statement. “While we have carefully considered our long-term strategic options, we have established that CVS Health is the ideal partner, given its focus on expanding access to health services and helping consumers navigate to the best care sites. “.
Following the close of the transaction, Armbrester will continue to lead Signify Health as part of CVS Health, CVS said.
Private equity funds affiliated with New Mountain Capital, which owns approximately 60% of Signify Health’s common stock, have decided to vote the shares they own in favor of the transaction, subject to the usual exceptions. CVS Health and Signify Health expect the transaction to close in the first half of 2023.
WHY THIS IS IMPORTANT
CVS Health, which acquired Aetna in 2018, has expanded into the supplier space through Minute Clinics and health screenings.
Home health is projected to increase due to an aging population and home care models that expanded during the pandemic.
Walgreens Boots Alliance recently expanded into the market through the purchase of CareCentrix, a platform that coordinates home care for plans, patients and providers.
Signify Health offers a home health platform and internal assessments. It has a network of more than 10,000 physicians across 50 states and a nationwide value-based provider network, combined with proprietary analytics and technology platforms, CVS said, adding that the acquisition would improve patient engagement, outcomes and coordination of care.
“Signify Health will play a critical role in advancing our health services strategy and provide us with a platform to accelerate our growth in value-based care,” said Karen S. Lynch, CVS Health President and CEO. “This acquisition will improve our connection with home consumers and enable suppliers to better meet patient needs as we execute our vision to redefine the healthcare experience. Additionally, this combination will strengthen our ability to expand and develop new product offerings. in a multi – payer approach “.
THE BIGGEST TREND
Signify Health’s network of doctors, doctors, nurses and medical assistants uses home visits to identify a patient’s clinical and social needs and then link them to appropriate follow-up care and community resources.
In 2022, Signify Health doctors expect to connect with nearly 2.5 million members at home, both in person and virtually, according to CVS. On average, they spend 2.5 times longer with a patient at home than providers spend during the average primary care office visit, CVS said.
Since acquiring Caravan Health in March, Signify Health has further expanded its focus on value-based care and population health as a partner to more than 170 providers participating in responsible care organizations serving Medicare beneficiaries.
Signify Health recently announced that its ACOs generated over $ 138 million in gross savings in 2021 and that by 2023 the Caravan business is expected to serve ACOs representing over 700,000 people rivaling many standalone platforms, CVS said.
As part of CVS Health, Signify Health will continue to improve its primary care enablement capabilities, including turnkey analytics, network and practice improvement solutions, to help suppliers transition to value-based reimbursement. and improve the quality of care.
ON THE DOCUMENT
“This is an important step as we continue to implement our strategy,” said Shawn Guertin, executive vice president and chief financial officer of CVS Health. “We expect the acquisition to significantly increase earnings and, as a result, are increasingly confident that we can achieve our long-term adjusted EPS targets, as outlined on our December 2021 Investor Day.”
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