CVS Health mulls bid for Signify Health

“We have been deliberate about our approach, which is meeting customers in the home, in the community and through digital connections. So, our strategy is to really meet consumers where they are.”

Karen Lynch

NEW YORK: CVS Health Corp is planning to

submit a bid to acquire Signify Health Inc as part of an expansion into home-health services, the Wall Street Journal has reported, citing people familiar with the matter.

CVS, which has drug stores and provides health insurance, is among the companies

seeking to submit initial bids this week, the newspaper said.

The Journal reported last week that Signify, which had a stock-market capitalisation of Us$4.66 bil (Rm21bil) as of Friday, was exploring strategic alternatives including a possible sale.

There’s no guarantee that the activity will culminate in a sale for Signify, the Journal reported. Representatives of CVS and Signify declined to comment on the deal speculation in emails to Bloomberg.

Purchasing a home-health company would align with chief executive officer Karen Lynch’s goal of moving CVS toward more types of direct care with patients. Competition is mounting with Amazon.com Inc’s recent deal to acquire primary-care clinic company One Medical.

“We have been deliberate about our approach, which is meeting customers in the 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 health-care providers.

The company announced in July it was winding down its Episodes of Care Services unit, citing uncertainty over government payment methdology, to focus on its Home and Community Services unit.

On its website, Signify refers to the Episodes of-care service as an “all-inclusive healthand-payment model, in which a single, bundled payment includes all services associated with the treatment for an illness, condition or medical event rather than a separate fee-for-service model.”

The wind-down was described by the company in an Aug. 4 filing.

“As of June 30, 2022, the Covid-19 pandemic continues to evolve and impact our Episodes of Care Services segment due to the passage of time between episode initiation and the performance and subsequent recognition of revenue for our services,” the filing said.

Signify’s shares have risen 40% so far this year, closing at US$19.87 (RM88.62) on Friday.