“Combining Oak Street Health’s platform with CVS Health’s unmatched reach will create the premier value-based primary care solution,” said CVS CEO Karen Lynch.
Updated at 6:14 am EST
CVS Health (CVS) – Get Free Report said it would buy Oak Street Health (OSH) – Get Free Report for $10.6 billion, including debt, ending weeks of speculation over the fate of the Chicago-based primary care center operator.
CVS said it will pay $39 for Oak Street Health in an all-cash transaction that it expects to close later this year. The deal has been approved by the boards of both companies, CVS said, and Oak Street will continue to be lead by current CEO Mike Pykosz once the transaction is completed.
Oak Street Health posted a 40% surge in third quarter revenues in November, which were pegged at $545.7 million, and said full year revenues would likely rise to around $2.155 billion.
The group operates around 161 care centers in the United States, and attended to around 210,000 patients over the three months ending in September.
“Combining Oak Street Health’s platform with CVS Health’s unmatched reach will create the premier value-based primary care solution,” said CVS CEO Karen Lynch. “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.”
CVS shares were marked 0.21% higher in pre-market trading immediately following confirmation of the deal to indicate an opening bell price of $86.16 each. Oak Street Health was marked 5.08% higher at $35.39 each.
CVS is set to publish its fourth quarter earnings prior to the start of trading on Wednesday, with analysts expecting a bottom line of $1.92 per share on revenues of $76.21 billion.
Last month, Karen Lynch told the JPMorgan healthcare conference in San Francisco that CVS Health expects to exceed its full-year revenue forecast of between $309 billion and $314 billion.
The group said Wednesday that it sees adjusted earnings in the region of $8.70 to $8.90 per share.
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This story was originally published February 8, 2023, 6:12 AM.
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