CVS Health has agreed to buy home healthcare provider Signify Health for about $8bn, beating Amazon in a hotly contested takeover battle and opening a new front in the pharmacy chain’s effort to become a diversified healthcare juggernaut.
Signify shareholders will receive $30.50 per share in cash, a 6 per cent premium to the company’s share price as of Friday’s close.
The Dallas, Texas-based company boasts a network of 10,000 clinicians across the US who provide in-home health assessments to a wide range of patients, including those covered by the government-funded Medicare programme.
“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 chief executive Karen Lynch.
CVS was already the largest drugstore chain in the US when, in 2019, it bought insurance group Aetna in what it characterised as an effort to build a heavyweight company with the power to bring down healthcare costs in America.
That transaction signalled a trend towards consolidation across the US healthcare sector. CVS’s larger rival, UnitedHealth Group, has also announced deals for companies that are active in home healthcare and other clinical services.
Analysts say the vogue for diversified healthcare companies reflects incumbents’ need to curb cost inflation as well as defend against potential disrupters. Amazon had also been among the bidders for Signify, the Financial Times and other outlets have previously reported.
Read more about the CVS deal here.