CVS Health Corp. may be about to take another deep dive into health care.
The drug store and health insurance giant is planning to make a bid to buy health-care platform Signify Health in a move to expand into home-health services. The news was first reported by the Wall Street Journal.
Signify Health is working with bankers to explore strategic alternatives, including a sale, and initial bids are due this week, with CVS planning to enter one, the report said. Signify, which had a stock-market capitalization of $4.66 billion as of August 5,has a platform that uses technology and analytics to support healthcare providers with in-home care.
CVS has been expanding its medical offerings and the company said last week that it would either purchase or take a stake in a primary-care company by the end the of the year. In remarks during the company’s second-quarter earnings call, president and CEO Karen Lynch said the company is looking to team up with a provider that has a strong management team and tech background and the ability to grow quickly.
“We are committed to extending our health services,” Lynch said. “And we are very encouraged and confident that we'll take the next step on this journey by the end of this year.”
Walgreens and Amazon have already entered the space. In October, Walgreens became the majority owner of VillageMd, with plans to open hundreds of primary care Village Medical practices at Walgreen locations. More recently, in July, Amazon said it would acquire One Medical, a membership-based primary health care provider, for $3.9 billion. And Walmart is opening freestanding clinics.
For Woonsocket, R.I.-based CVS, which has a market value of $134 billion, a deal would help fulfill its stated ambition to become an even bigger provider of medical services. The company has indicated it hopes to have a deal in place to help it do so by year-end. Wall Street has largely focused on CVS’s efforts to add primary-care practices and doctors to its payroll, though executives have also discussed their ambitions to expand its in-home health presence.