Sep 6, 2022 - Economy & Business

CVS beats out Amazon for Signify Health

Illustration of a doormat with a red cross outside a front door.
Illustration: Gabriella Turrisi/Axios

CVS Health has agreed to acquire Dallas value-based care enabler Signify Health for approximately $8 billion.

Why it matters: After losing out on One Medical to Amazon and watching Walgreens make bets on VillageMD and CareCentrix, CVS has finally gained a major foothold in health care delivery.

Zoom in: CVS has been outspoken about its intent to move closer to the patient, away from its historical roots. Signify moves CVS away from the pharmacy — and into the home.

  • Through the deal, CVS gains access to 10,000-plus clinicians nationwide that provide health and wellness visits to nearly 2.5 million patients in the home.

How it works: Signify helps health systems and health plans move to value-based care arrangements by creating risk contracts where it shares in both upside and downside risk.

Details: CVS on Monday agreed to acquire Signify for $30.50 per share.

  • New Mountain Capital, which owns a 60% stake in Signify Health, agreed to vote in favor of the transaction.
  • CEO Kyle Armbrester will continue to lead Signify as part of CVS.
  • BAML advised CVS, while Goldman Sachs and Deutsche Bank, as first reported by Axios, are advising Signify.

Context: This is the pharmacy retailer's largest M&A move in health care since buying Aetna in a $69 billion deal completed in 2018.

  • It scooped up Caremark RX for around $27 billion in 2007.
  • CVS was the runner-up for One Medical, which went to Amazon for $4 billion in July.

Of note: CVS is seeking a buyer for BSwift, the benefits technology business it acquired eight years ago, Axios reported last week.

Sarah Pringle co-authors the Axios Pro Health Tech deals newsletter. Start your free trial at AxiosPro.com.

Go deeper