The retail pharmacy and healthcare giant CVS Health has struck an $8 billion deal to acquire Signify Health, one of the largest home health companies in the U.S. CVS will pay shareholders of Signify Health $30.50 per share. CVS Health expects to fund the transaction with existing cash from its balance sheet and other available resources. 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.
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 and virtually. Last year, Signify Health generated $773 million in revenue and $171 million in adjusted EBITDA. The company acquired Caravan Health for $250 million earlier this year to further expand its reach in value-based care and home health.
And CVS isn’t the only major corporation moving into the home health space. Optum, a significant part of UnitedHealth Group, paid $6 billion for LHC Group, Inc. in March. Humana Inc, the health insurance giant, paid $5.7 billion for the 60% stake it did not own in Kindred at Home in April 2021.
CVS’ acquisition of Signify Health is the largest Home Health & Hospice deal of the year based on disclosed price, according to the LevinPro HC database. Following the close of the transaction, Kyle Armbrester will continue to lead Signify Health as part of CVS Health. Signify Health’s network of more than 50 health plan clients and their members will augment CVS Health’s offering of payor-agnostic solutions for a diverse set of health plan and employer clients.
