CVS Announces Deal to Acquire Home-Healthcare Company Signify

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CVS Health Corp. CVS -0.49% is betting $8 cardinal that the location telephone is the aboriginal of healthcare.

The drugstore giant’s woody to get home-healthcare company Signify Health Inc., SGFY 1.34% announced Monday, volition adhd 10,000 contracted doctors and clinicians and springiness CVS a manus successful coordinating aesculapian attraction for millions of Americans.

CVS, the nation’s biggest healthcare institution by revenue, said that it agreed to get Signify for $30.50 per stock successful an all-cash deal, confirming earlier Wall Street Journal reports. CVS said it expects the deal, finalized implicit the play aft a income process that drew interest from companies from Inc. to UnitedHealth Group Inc., to adjacent successful the archetypal fractional of 2023.

CVS for years has worked to alteration itself from a pharmacy concatenation to an integrated supplier of aesculapian services, with the biggest measurement being its 2018 acquisition of insurer Aetna. Initially, CVS envisioned a exemplary centered connected pharmacists, in-store clinics and a elephantine security business.

But Karen Lynch, who took implicit arsenic CVS CEO past year, determined that the institution needs doctors connected its payroll to fulfill those ambitions. She besides acceptable retired to grow CVS’s beingness successful location healthcare, request for which has been rising arsenic the U.S. colonisation has aged.

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Major quality successful the satellite of deals and deal-makers.

“The location telephone is having what I’d qualify arsenic a renaissance,” she said successful an interview. “This woody enhances the transportation to consumers successful the home.”

Signify’s model is based connected an analytics-and-technology platform, utilized by doctors that spell into homes equipped with connected iPads, that allows the clinicians to measure diligent needs and link them with follow-up services.

The clinicians “operate overmuch like Uber drivers,” said Kyle Armbrester, Signify Health main executive. “We’re successful a gig system and this is simply a flexible model.”

Ms. Lynch said CVS, by being the attraction coordinator, tin nonstop much patients to different CVS services and make savings for patents. She said CVS remains focused connected expanding into superior attraction successful summation to in-home health. Ms. Lynch has antecedently said the institution is looking to get primary-care practices.

The woody is the latest for a home-health company. Rival Walgreens Boots Alliance Inc. past week finalized a woody to acquisition a bulk involvement successful CareCentrix, Inc., different home-healthcare platform.

This spring, UnitedHealth agreed to buy LHC Group Inc., 1 of the country’s largest home-health firms, for astir $5.4 billion. Last year, Humana Inc. agreed to instrumentality afloat power of home-health supplier Kindred astatine Home. Both LHC and Kindred supply continuous home-healthcare services.

Signify has grown to serving much than 2.5 cardinal homes from astir 300,000 5 years ago, said Mr. Armbrester, who is acceptable to stay CEO of Signify Health aft the acquisition.

With Signify, CVS besides is acquiring Caravan Health, which manages accountable-care organizations. In an ACO, providers typically instrumentality work for groups of patients portion insurers connection fiscal rewards for ACOs that prevention wealth and deed prime goals. Caravan works with 170 providers that enactment successful ACOs serving Medicare beneficiaries. Signify acquired Caravan successful March.

New York-based private-equity steadfast New Mountain Capital formed Signify successful 2017 by merging 2 companies. At the clip it had an endeavor worth of astir $600 million. Since then, it has grown steadily organically and done acquisitions.

“CVS should beryllium capable to amplify the standard of the Signify network, scope much patients, past integrate pharmacy and broader attraction absorption into the company’s work lines,” said Matt Holt, Signify president and New Mountain president of backstage equity.

—Laura Cooper contributed to this article.

Write to Sharon Terlep astatine [email protected]

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