CVS Health buys Signify Health for $8 billion: Desperate or strategic?

CVS Health® (NYSE: CVS) has completed its acquisition of Signify Health (NYSE: SGFY), a leading technology and services company. Based in Dallas, Signify Health has a national network of more than 10,000 clinicians across all 50 states. The acquisition will help advance the health giant’s push into value-based care.

Under the terms of the transaction, each outstanding share of Signify Health common stock is being exchanged for $30.50 in cash, representing a total transaction value of approximately $8 billion. Following the deal, Kyle Armbrester will continue to lead Signify Health.

“This transaction advances our value-based care strategy by enhancing our presence in the home,” said CVS Health President and CEO Karen S. Lynch. “Our expanded capabilities will bring us closer to the consumer as we continue to redefine how people access and experience care that is more affordable, convenient and connected.”

“We’re excited to welcome the Signify team to CVS Health,” said Lynch. “I’m confident our shared values and complementary capabilities will work together to better address patient needs.”

“Our mission has always been to build trusted relationships to make people healthier,” said Kyle Armbrester, who will continue to lead Signify Health. “As part of CVS Health, we will be uniquely positioned as a payor-agnostic business to support a more proactive, preventive and holistic approach to patient care.”

Karen S. Lynch has been ranked No. 5 in a list of the world’s best CEOs for 2023; meanwhile, CVS Health ranked No. 4 in the CEOWORLD magazine’s ranking of the most influential companies in the world.

CVS also has Aetna – one of the largest health insurers in the country – as part of its network, as well as Caremark, which is its prescription benefit management subsidiary.

“At the end of the day, this is small compared to CVS Health’s overall holding, and so it doesn’t remove much of the overhang,” said Prof. Dr. Amarendra Bhushan Dhiraj, macro-economist, investment strategy analyst, and CEO at the CEOWORLD magazine, describing the uncertainty. “However, look at little more closely, and this acquisition is packed full of strategic and tactical benefits.”

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