CVS Signify Health – CVS to Acquire Signify Health for $8 Billion
CVS Signify Health – CVS Health, one of the biggest pharmaceutical giants in the United States, has recently announced that they are acquiring Signify for $8 billion. The transition will be complete at $30.50 per share in cash, and the total will come up to around $8 billion.
It is not the first time in the history of corporate America that a big giant is acquiring small companies like Signify. At the same thing, it is not the first time CVS Health has been doing something like that. CVS has a market cap of more than $134 billion, and it reported a net profit, of course, of $7.9 billion back in 2021.
During the announcement of CVS signify health, the company also mentioned that Signify Health is among the leading healthcare platforms in the United States, and they are going to play a critical role in advancing the healthcare services and strategy of CVS Health.
All about Signify Health
Signify health is one of the unique platforms that combine technology, analytics, and networks to create value-based payment programs. The company has expertise in health risk assessments, value-based care, etc.
The company is also known to have a network of more than 10,000 clinics across the United States. Signify health is known to improve patient engagement, care coordination, and patient outcomes for four stakeholders across the healthcare systems.
Signify Health was founded back in December 2017 by Steven Senneff in Dallas, Texas. The stocks of companies are listed on the New York Stock exchange at the price of $29. It is also among the few companies to feed the stock price surge of around 33% on its first day of trading.
What does CVS Say About the Deal?
Soon after the announcement, CVS Health also released a press statement mentioning that both companies hold a common goal of building a more responsive, protective, and proactive patient care approach.
In the first six months of 2022, signify health has connected with more than 1.25 million unique members across all 50 states of the United States. By the end of the year, the signify is expected to connect with more than 2.5 million unique members.
At the same time, CVS Health also believed that the current accusation would enhance the health connection of CVS with its customers’ in-home care. CVS Health outlined its long-term adjusted earning per share goals Back in December 2021 at its investors’ day. The company is expecting to achieve the outlined goal with the help of this acquisition.
The Reaction of the market to CVS Signify Health.
Following the news of CVS signifying health, the stock market did not react much. While the shares of CVS Health dropped around 0.5%, the shares of Signify Health jumped around 1.3%.
As a newbie in the stock market, you might think that half a percent over 1.3% is enough reaction, but it is a normal moment on any regular day. Apart from that, most big fish in the stock market already had news of the merger, and the shares usually reacted before the news.
So it was pretty normal that the stock market did not react much to the merger of CVS Health with Signify health. As you’re already aware, the transition is going to be complete in the first half of 2023, and we can expect some movement in stocks by the second half of 2023.
CVS Health will take some time to adjust and report revenues after the merger. Based on those revenues, you might see some movement in the stock price of CVS Health. Till then, we are going to wait and watch.
Financial analysts at JP Morgan called the deal a win-win-win for patients, payors, and CVS Health. The financial analyst added that JP Morgan further mentioned in its press release that the accusation also signifies health is going to help CVS Health get closer to the value-based care relationships they were looking for in the past few months.
CVS Health will be in the upper hand in the industry as they will have more opportunities to influence more lives.
What does the acquisition mean for customers?
Every customer of CVS Health and signify health must be thinking about what the acquisition is going to change for the customers.
One of the biggest benefits we are seeing in the acquisition for customers is that after the initial diagnosis by Signify, CVS pharmacy will help the customers in the follow-up of the diagnosis.
Both companies are going to end the bridge between diagnosis and treatment. Diagnosis doesn’t mean that you will get better in some days. It is merely the first step, and CVS Health is going to provide the treatment you require as a customer.
Apart from that, we can also see a major trend in low-cost diagnosis and treatment for most diseases. Everyone understands that it is very costly to get yourself diagnosed and treated with most diseases in the United States.
Even the CEO of CVS Health has mentioned in the press statement that the current accusation is going to enhance their relationship with customers and in-home diagnosis. CVS Health has a long history of acquiring similar companies, as they acquired Aetna back in 2018. Apart from that, CVS Health also has a great service chain named minute clinic, which is known to provide low-cost treatment for common diseases.
CVS Health has done a tremendous job in the last few decades, and they are also in partnership with the Centers for Disease Control and Prevention to provide free COVID services to all eligible Americans throughout the nation.
Another thing you should not at this point is that CVS Health is also going to scoop up Carvan’s health. Signify Health acquired Caravan in early 2022. The deal is going to finalize in the first half of 2023, and we can expect all the benefits from the second half of 2023.
When will CVS Signify Health start its services?
The press release of the acquisition mentioned that CVS signifies health will finish the takeover in the first half of 2023. By that time frame, we can expect that they are going to start their services by the second half of 2023.