The acquisition will provide new revenue at a time when growth in the company's legacy pharmacy and retail businesses is expected to slow down
CVS Health’s $10.6 billion acquisition of Oak Street Health will provide new revenue at a time when growth in its legacy pharmacy and retail businesses is expected to slow down.
The deal to acquire Oak Street was formally announced on Wednesday morning, alongside the pharmacy giant’s stronger-than-expected fourth-quarter results. CVS said it plans to pay $39 per share in cash, a 16% premium over Oak Street’s closing stock price of $33.68 on Tuesday. The acquisition is expected to close this year.
But CVS CFO Shawn Guertin also told investors that the acquisition will improve “the retention of our Aetna [Medicare Advantage] members through the improved outcomes and experience provided at Oak Street clinics,” in addition to “driving greater utilization of CVS Pharmacy and Caremark capabilities.”
The focus on “owning” primary care is the latest obsession for healthcare-hungry tech giants and legacy pharmacy chains and health insurers alike. Amazon AMZN last year announced plans to buy direct primary-care provider One Medical ONEM for $3.9 billion. Walgreens Boots Alliance WBA and Cigna CI are spending $8.9 billion to acquire urgent-care provider Summit Health-CityMD. And Humana HUM teamed up with the private-equity firm Welsh, Carson, Anderson & Stowe to put an additional $1.
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