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CVS plans to bid for Dallas-based home health provider Signify Health

CVS plans to bid for Dallas-based home health provider Signify Health
Written by boustamohamed31

CVS Health Corp. plans to submit a bid to acquire Dallas-based Signify Health Inc. as part of an expansion of home health services, The Wall Street Journal they reported, citing people familiar with the matter.

CVS, which owns pharmacies and provides health insurance, is among the companies looking to submit initial offers this week. Journal reported on Sunday. The Journal said Signify, whose stock market capitalization was $4.66 billion as of Friday, was exploring strategic alternatives, including a possible sale.

There is no guarantee that the transaction will result in a sale to Signify, the Journal reported. Representatives for CVS and Signify declined to comment on the deal speculation in emails to Bloomberg.

The purchase of the home health care company would align with CEO Karen Lynch’s goal of moving CVS into more types of direct patient care. Competition is intensifying with Amazon.com Inc.’s recent deal to acquire the primary care clinic company One Medical.

“We discussed our approach, which is meeting customers at home, in the community and through digital connections,” Lynch said in an interview last week with Bloomberg News. “So our strategy is to really meet consumers where they are.”

Signify has a platform that uses technology and analytics to support home healthcare providers.

The company announced in July that it was exiting the bundled health insurance business, a move the company expected to cost up to $35 million in severance and other payouts to employees.

Signify said it plans to focus on what it sees as a fast-growing and more profitable sector — home healthcare. Since the start of the COVID-19 pandemic, health care providers have seen an increase in demand for home services, especially for vulnerable populations who did not feel safe going to the doctor or hospital for fear of catching the virus.

The home and community services division of Signify, backed by acquisition for $250 million of Caravan Health earlier this year, benefited from this increased demand. The company offers remote patient monitoring, distribution channels, member engagement and care optimization to home health care providers.

The Caravan Health deal brought together two companies focused on value-based payment models for everything from advanced primary care to specialty care packages to total cost of care contracts. It has built a large national network of doctors, nurse practitioners and licensed social workers reaching more than 2 million homes, said Signify CEO Kyle Armbrester told Fierce Healthcare at this time.

“What we’re building is going to be something that will actually finally allow a health system to embrace value-based care,” Armbrester told the publication.

Shares of Signify are up 40% so far this year, closing at $19.87 on Friday.

Signify ended 2021 with revenue of $773.4 millionwhich is a 27% increase from 2020. It went public last year with a market capitalization of $7.12 billion after grossing $564 million on its opening day.

Kevin Miller and Julie Johnson, Bloomberg and Dallas Morning News research.

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