CVS Health will buy Chicago-based primary care provider Oak Street Health in a $10.6 billion deal, the healthcare pharmacy said Wednesday.
Woonsocket, Rhode Island-based CVS has agreed to pay $39 per share in cash and take on debt in a transaction that will close this year, assuming regulatory approval. Oak Street CEO Mike Pykosz will continue to lead the operation.
Oak Street, which will become part of CVS’s healthcare delivery organization, employs approximately 600 providers in 169 locations across 21 states. CVS is expected to grow to 300 sites by 2026, CVS said.
The Oak Street acquisition comes as major retailers, including Walgreens Boots Alliance and Amazon, have striking deals to expand their presence in healthcare.
“Strengthening our value-based services is at the core of our strategy as we continue to redefine the way people access and experience care that is affordable, convenient and connected. more,” CVS President and CEO Karen Lynch said in a press release.
In September, CVS announced plans to buy Signify Health, a technology company that supports doctors and in-home healthcare, in an $8 billion deal to be completed in the first half of this year. Signify employs more than 10,000 clinicians in all 50 states.
CVS on Wednesday reported operating income of $3.62 billion for the fourth quarter, up 62.3% from a year ago. Revenue rose 9.5% to $83.85 billion. Operating expenses increased 7.9% to $80.23 billion.
The Wall Street Journal reported on Monday that CVS and Oak Street were expected to close the deal earlier this week, sending Oak Street shares soaring when the market opened on Tuesday. Shares were up 3.3% at $34.72 per share in pre-opening trading Wednesday morning.
This is an evolving story. Check back for updates.
