CVS Health reportedly inching closer to Oak Street Health acquisition for $10.5B
CVS Health is reportedly close to a deal to acquire primary care provider Oak Street Health for roughly $10.5 billion including debt, according to a Wall Street Journal report.
The report, which cited people with knowledge of the matter, said the companies are discussing a price of about $39 a share and that CVS, which reports earnings on Feb. 8, could announce the deal as soon as this week.
Oak Street Health is a network of value-based primary care centers for adults on Medicare and the only primary care provider to carry the AARP name, according to the company. Last month, during the J.P. Morgan Healthcare Conference, Bloomberg reported that CVS was exploring a $10 billion deal to buy the primary care company.
[Read more: CVS Health report highlights need for expanded role of retail pharmacists]
In January, CVS announced a partnership with Carbon Health, a hybrid healthcare company that "combines expert care with proprietary technology for easy everyday health."
Carbon Health received $100 million from CVS Health Ventures, CVS Health’s corporate venture capital platform, as part of an initial close of its Series D round. The funding enables the primary care provider to scale its Connective Care model into new geographies, sign new value-based care arrangements and invest in technology as it aims to be a national leader in primary and urgent care.
CVS began expanding beyond retail pharmacies in 2018 when it acquired health insurance company Aetna in a $69 billion deal. In September, the comapny announced it was set to acquire home health company Signify Health for $30.50 per share in cash, representing a total transaction value of approximately $8 billion.
Signify Health is a leader in Health Risk Assessments, value-based care and provider enablement. With a network of more than 10,000 clinicians across all 50 states and a nationwide value-based provider network, combined with its proprietary analytics and technology platforms, Signify Health is improving patient engagement, patient outcomes and care coordination for stakeholders across the healthcare system, CVS Health said.
[Read more: CVS Health to acquire Signify Health for $8B]
In 2022, there was speculation that CVS was in talks to buy Cano Health, and during its Q2 earnings call in August CEO Karen Lynch said the retailer wanted to enhance its health services in primary care, provider enablement and home health.
Oak Street Health, which went public in 2020, operates 169 primary care clinics in 21 states with 159,000 at-risk patients receiving care, according to information the company presented at JPM. The company estimates 2022 revenue will be $2.16 billion.
Oak Street Health announced today that "in view of the unusual market activity in the company’s stock, the New York Stock Exchange has contacted the company in accordance with the Exchange’s usual practice. The company stated that its policy is not to comment on unusual market activity."