CVS Health is seeking to buy Signify Health as part of its expansion into home health services, Cara Lombardo, Laura Cooper, and Sharon Terlep report for the Wall Street Journal.
Signify Health uses analytics and technology to help health plans and providers with in-home care. It also offers home health evaluations for Medicare Advantage and other managed-care plans. Since finalizing its deal to buy Caravan Health earlier this year, the company supports around $10 billion in total medical spending.
Signify first went public in February 2021 with an IPO of $24, but its stock has since fallen to $19.87 as of Friday. In July, Signify said it planned to wind down its episodes of care business after changes to CMS' Bundled Payments for Care Improvement-Advanced model.
Last week, the Journal reported that Signify Health was exploring "strategic alternatives including a sale." Initial bids to purchase the health care services company are due this week—and CVS plans to enter a bid, according to people familiar with the situation. However, other managed-care providers and private-equity firms will likely submit competing bids.
Ultimately, Signify Health, which has a current market value of roughly $4.7 billion, may not reach a deal with CVS or any other potential buyers.
If CVS reaches a deal with Signify Health, the acquisition will help the company become an even larger provider of medical services—and CVS has indicated it hopes to have a finalized deal by the end of 2022.
While Wall Street has primarily focused on CVS' efforts to add primary-care practices and doctors to its offerings, CVS executives have also voiced their ambitions to expand the company's home health presence.
According to people familiar with the situation, CVS previously considered a deal for the parent of primary-care clinic operator One Medical, which Amazon ultimately agreed to purchase for around $3.9 billion last month. (Lombardo et al., Wall Street Journal, 8/7; Minemyer, Fierce Healthcare, 7/8)
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