CVS Health has acquired Signify Health, besting Amazon, UnitedHealth Group and others in acquiring the home health platform.
CVS has entered a definitive agreement to acquire Signify Health for $30.50 per share in cash, representing a total transaction value of approximately $8 billion, CVS announced on Monday.
Signify was reportedly for sale by auction, with board members holding a meeting on Labor Day to discuss the bids.
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.”
Following the close of the transaction, Armbrester will continue to lead Signify Health as part of CVS Health, CVS said.
Private equity funds affiliated with New Mountain Capital, which owns approximately 60% of the common stock of Signify Health, have agreed to vote the shares they own in favor of the transaction, subject to customary exceptions. CVS Health and Signify Health anticipate that the transaction will close in the first half of 2023.
WHY THIS MATTERS
CVS Health, which acquired Aetna in 2018, has been expanding into the provider space through Minute Clinics and health screenings.
Home health is projected to grow due to an aging population and models for home care that expanded during the pandemic.
Walgreens Boots Alliance recently expanded into the market through the purchase of CareCentrix, a platform that coordinates care in the home for plans, patients and providers.
Signify Health offers a home health platform and in-home evaluations. It has a network of more than 10,000 clinicians across all 50 states and a nationwide value-based provider network, combined with proprietary analytics and technology platforms, CVS said, adding the acquisition would improve patient engagement, outcomes and care coordination.
“Signify Health will play a critical role in advancing our healthcare services strategy and gives us a platform to accelerate our growth in value-based care,” said CVS Health president and CEO, Karen S. Lynch. “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 healthcare experience. In addition, this combination will strengthen our ability to expand and develop new product offerings in a multi-payor approach.”
THE LARGER TREND
Signify Health’s network of clinicians, physicians, nurse practitioners and physician assistants utilize home-based visits to identify a patient’s clinical and social needs and then connect them to appropriate follow-up care and community-based resources.
In 2022, Signify Health’s clinicians expect to connect with nearly 2.5 million members in the home, both in-person and virtually, according to CVS. On average they spend 2.5 times longer with a patient in the home than providers spend in the average primary care office visit, CVS said.
Since acquiring Caravan Health in March, Signify Health has further expanded its focus on value-based care and population health as a partner to over 170 providers participating in accountable care organizations serving Medicare beneficiaries.
Signify Health recently announced that its ACOs generated more than $138 million in gross savings in 2021, and in 2023 the Caravan business is expected to serve ACOs representing over 700,000 people rivaling many standalone platforms, CVS said.
As part of CVS Health, Signify Health will continue to advance its primary care enablement capabilities, including turnkey analytics, network and practice-improvement solutions, to help providers transition to value-based reimbursement and improve quality of care.
ON THE RECORD
“This is a major step as we continue to execute on our strategy,” said CVS Health Executive Vice President and Chief Financial Officer Shawn Guertin. “We expect the acquisition to be meaningfully accretive to earnings and, as a result, are increasingly confident we can achieve our long-term adjusted EPS goals as outlined at our Investor Day in December 2021.”