CVS will acquire the massive home health company ‘Signify Health’ for nearly $8 billion

The companies announced on Monday that CVS Health has reached an agreement to buy Signify Health, a provider of in-home healthcare, for around $8 billion.

In an acquisition that would expand on its expanding health-care offerings, CVS said that it will pay $30.50 per share in cash for Signify. Technology and analytics are offered by Signify to support in-home patient care.

In a news statement, CVS Health President & CEO Karen Lynch remarked, “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.”

The agreement comes as rivals like Amazon and Walgreens expand their presence in the healthcare industry. Amazon said in July that it would buy primary care company One Medical for around $3.9 billion.

According to FactSet, the market value of Signify Health as of Friday’s close was around $6.7 billion, or $28.77 per share. Shares have increased by nearly 45% over the past month. On August 2, The Wall Street Journal reported that Signify was looking at various strategic options, including a sale.

Shares of Signify, which floated in February 2021, rose in late August following rumours that Amazon was one of the prospective buyers.

By the end of the year, CVS intends to buy or invest in a primary-care company, the company said last month.

The acquisition of Signify comes after other shifts into primary healthcare. Customers can receive vaccinations or urgent care at MinuteClinic locations located inside of CVS shops. The pharmacy benefits manager Caremark and insurer Aetna were previously bought by CVS. Recently, some establishments started offering mental health therapy.

The transaction is expected to finalise in the first part of the following year, subject to regulatory approval.

According to the companies, private equity company New Mountain Capital, which owns nearly 60% of Signify’s common stock, agreed to support the merger.

Tuesday at 8:30 a.m. ET, CVS Health and Signify Health will have a conference call for analysts and investors to go through the deal.