CVS outbids Amazon for Signify Health Inc

Signify Health Inc (NYSE: SGFY) is in the green this morning after CVS Health Corp (NYSE: CVS) said it will buy the home-healthcare company for $8.0 billion.

Signify shareholders to get a 6.0% premium

CVS is paying $30.50 a share for the healthcare platform that translates to about a 6.0% premium on its previous close. New Mountain Capital – a private equity firm that has a 60% stake in Signify Health has agreed to support the deal.

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Others bidding for the health technology company included Amazon.com Inc as we reported here. In the press release, Kyle Armbrester – the Chief Executive of Signify Health said:

As we carefully considered our long-term strategic options, we determined that CVS Health is the ideal partners, given its focus on expanding access to health services and helping consumers navigate to the best sites of care.

Including the response to the healthcare news today, “SGFY” is now up more than 150% from its year-to-date low.

Signify Health says it will fund the agreement primarily with cash on hand.

Deal to close next year in the first half

The transaction is expected to complete in the first half of 2023 so long that it satisfies the customary closing conditions, including regulatory and shareholders’ approval. Karen Lynch – the President and CEO of CVS Health said:

Signify Health will play a critical role in advancing our health care services strategy and gives us a platform to accelerate our growth in value-based care. This acquisition will enhance our connection to consumers.

Shares of the healthcare giant are roughly flat on Tuesday.

Last month, Signify Health reported better-than-expected earnings for its fiscal second quarter, even though revenue was a bit below the Street estimates.