CVS Health and Oak Street Health have reportedly entered into a definitive agreement under which CVS Health will acquire Oak Street Health in an all-cash transaction at $39 per share, representing an enterprise value of approximately $10.6 billion.
The acquisition marks the drugstore chain's biggest move into primary care yet, making it a one-stop shop for medical care. This announcement follows another huge deal for CVS - the planned purchase of home care platform Signify Health for $8 billion, which is under regulatory review.
Oak Street Health is a leading multi-payor, value-based primary care company helping older adults stay healthy and live life more fully. It runs 169 clinics in 21 states, employing about 600 primary care providers. With an innovative care model and technology platform designed to deliver consistently superior outcomes and patient experiences, Oak Street Health has demonstrated that its model is scalable.
This deal can significantly benefit patients' long-term health by reducing care costs and improving outcomes – particularly for those in underserved communities. Oak Street Health centres are located where health care services are needed most; more than 50 per cent of Oak Street Health's patients have a housing, food or isolation risk factor.
"Combining Oak Street Health's platform with CVS Health's unmatched reach will create the premier value-based primary care solution," CVS Health President and CEO Karen S. Lynch said in a news release. "Enhancing our value-based offerings is core to our strategy as we continue to redefine how people access and experience care that is more affordable, convenient and connected."
Oak Street Health is differentiated by its leading technology solution, Canopy, which is fully integrated with Oak Street Health's operations and utilized when determining the appropriate type and level of care for each patient. That care will be enhanced by CVS Health's community, home and digital offerings.
CVS Health and Oak Street Health anticipate that the transaction will close in 2023.
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