CVS’ $8 billion deal for Signify speeds drugstore chain’s push into health care

Drugstore operator CVS Health Corp. said Monday that it will buy home-health provider Signify Health for $8 billion.

CVS said Signify has more than 10,000 employees including physicians and nurses, a presence in every state, and offers technology platforms.

“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 health care experience,” CVS CEO Karen Lynch said in a statement announcing the deal.

The acquisition would continue CVS’ effort to grow from its pharmacy-chain roots to other sectors of the health industry. In 2018, the Woonsocket, Rhode Island, company purchased health insurer Aetna for $69 billion.

CVS will pay $30.50 per share in cash for Signify. According to a CVS presentation, the deal has a stock value of $7.6 billion, with the total transaction rising to about $8 billion with debt, equity appreciation rights and other items are included.

Signify Health shares were up 0.4% on the announcement, while CVS stocks dipped 0.3% — in line with the overall market which is in a slump following the Labor Day holiday.

CVS will also scoop up Caravan Health, which Signify agreed to buy earlier this year. Caravan works with accountable-care organizations, which are groups of hospitals, doctors and other providers who serve Medicare patients.

The deal is subject to regulatory approval and a vote of Signify shareholders. CVS said private equity funds affiliated with New Mountain Capital, which owns about 60% of Signify stock, have agreed to vote their shares for the deal.

The companies said they expect the deal to close in the first half of next year.

CVS Health in November 2021 announced it would be closing about 300 stores a year for the next three years, as it adjusted to changing customer needs. Analysts at the time noted that the retail giant would need to invest in its retail locations and health care services to ensure its future.