Beating Other Bidders, CVS Health Inks Deal To Acquire Dallas’ Signify Health in $8B Deal

Beating out other big-name contenders like Amazon in the bidding battles, CVS Health is set to acquire Dallas’ Signify Health.

The Rhode Island-based company behind the national chain of pharmacies has inked an agreement to acquire the local tech-enabled home health services firm for $30.50 per share—a deal valued at around $8 billion.

“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,” Kyle Armbrester, CEO of Signify Health, said in a statement. “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.”

‘Enhancing’ the connection to consumers

As it looks to reach more patients in the home, CVS President and CEO Karen Lynch said the move will help better address those patients’ needs, while bolstering its ability to expand its footprint in the value-based care market with “new product offerings in a multi-payor approach.”

Kyle Armbrester

Armbrester added that the two companies have a “shared vision” of providing “a more proactive, preventive and holistic approach to patient care.”

Following the expected close of the deal in the first half of next year, Armbrester will continue to lead the 600-person Signify team as part of CVS Health’s leadership, which is valued at more than $130 billion and saw nearly $300 billion in revenue last year.

Through a network of more than 10,000 clinicians across every state in the country, Signify uses home-based visits to target a patient’s social and clinical needs, then, using an “intelligent technology platform,” connects them to follow-up care and community-based resources, with the goal of tackling chronic conditions and preventing hospitalizations. By the end of the year, Signify says it expects to connect virtually and in-person with nearly 2.5 million patients.

CVS beat out Amazon, UnitedHealth Group, and Option Care in the bidding to acquire Signify, which had a market valuation of around $4 billion in July, Bloomberg reported.

“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,” Lynch said. “This acquisition will enhance our connection to consumers in the home… as we execute our vision to redefine the health care experience.”

Move expected to make ‘significant impact’ on health care

As with the most recent news, Signify’s growth has come through a string of merger-and-acquisition deals. The company was first formed in late 2017 via the merger of local firms CenseoHealth and Advance Health—following their recapitalization by New Mountain Capital, the New York-based private equity firm that owns around 60% of Signify. New Mountain later merged Signify with fellow portfolio company Remedy Partners in 2019.

The company went public last February, raising $564 million in an IPO that saw it debut on the New York Stock Exchange—where CVS also trades—under the ticker SGFY. Signify furthered its expansion into the value-based care and population health business with its acquisition of Kansas City’s Caravan Health, which is partnered with more than 170 providers participating in accountable care organizations, reaching an expected more than 700,000 people by the end of next year.

“We formed Signify Health… to build a strategic innovation platform focused on leveraging technology as a catalyst for connecting key health care stakeholders to drive better patient outcomes,” Matt Holt, president of private equity and managing director at New Mountain Capital, said in a statement. “Together with CVS Health, Signify is uniquely positioned to continue to lead the transformation to value-based care. We look forward to the significant impact this transaction will make on health care for years to come.”

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