After spending $8 billion to acquire healthcare service provider Signify Health and $10.6 billion for primary care provider Oak Street Health, retail giant CVS Health Corp. seems to be winding down its M&A strategy.
CEO Karen Lynch told investors on May 3rd that CVS would pause its recent acquisition spree as it focuses on integrating its recent purchases.
CVS will integrate Signify and Oak Street with its other businesses in the near term. Longer term, Lynch said, the company might look at additional opportunities in technology for home or health services.
Lynch also said there’s an opportunity to “connect the dots” among itself and the two acquisitions to add value through CVS’s retail health clinics, pharmacies and Medicare plans.
CVS cut its full-year profit forecast on Wednesday to account for transaction and integration costs related to the two deals.
On the brick-and-mortar side, CVS is on track to close 300 retail locations in 2023 and close 900 stores by the end of 2024.
This strategy shift seems to be a growing trend in the retail healthcare world. Retail rival Walgreens Boots Alliance announced in January that it would also hold off on striking new deals in the short term after a flurry of acquisitions in the healthcare space.
