CVS nears deal to buy Oak Street Health: WSJ

FAC Health It is reportedly nearing an agreement to acquire Oak Street Health, a community-focused primary health care provider Medicare, for approximately $10.5 billion including debt.

In accordance with reporting Wall Street Journal Citing sources familiar with the deal, the companies are considering a price of around $39 per share. The acquisition could be announced this week, pushing the pharmaceutical and retail giant into deeper healthcare delivery.

Shares in the primary health care provider soared after the news broke late Monday night. bloomberg first reported last month that CVS is looking into acquiring Oak Street Health.

CVS and Oak Street Health said they do not comment on rumors or speculation.

BIG TREND

According to presentation at last month’s JP Morgan Healthcare conference, Oak Street Health owns and operates 169 clinics in 21 states. In the third quarter, the primary care provider reported $545.7 million in revenue, up 40% year-over-year. The company also posted a net loss of $130.4 million compared to a loss of $110 million in the third quarter of 2021.

Retail companies such as CVS, Walgreens, Walmart and Amazon are expanding their footprint in healthcare delivery.

In January, Hybrid healthcare provider Carbon Health announced that it has received a $100 million investment from CVS Health Ventures and the pharmaceutical company will be testing Carbon’s offerings in specific locations.

CVS is also recent agreed to acquire Signify Health for approximately $8 billion, ahead of Amazon, UnitedHealth Group and others in buying the home health platform. At the time, the companies said the deal was likely to close during the first half of the year.

Competitor Walgreens is also taking steps in that direction. In November, VillageMD, a company-supported primary care provider, announced plans to acquire Summit Health, a multidisciplinary medical practice and parent company of emergency care provider CityMD. Walgreens said it will invest $3.5 billion in equity and debt to support the deal.