CVS Health announced they are acquiring primary care health company Oak Street Health in a deal valued at roughly $10.6 billion.
Oak Street, which caters to adult patients on Medicare, has 169 medical centers in 21 states, employing about 600 primary care providers. The all-cash deal has CVS paying $39 per share, CVS announced Wednesday.
"Combining Oak Street Health’s platform with CVS Health’s unmatched reach will create the premier value-based primary care solution," CVS Health President and CEO Karen S. Lynch said in a statement. "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."
Oak Street is projected to expand significantly in coming years. The company expects to grow to more than 300 centers by 2026.
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"This agreement with CVS Health will accelerate our ability to deliver on our mission and continue improving health outcomes, lowering medical costs, and providing a better patient experience while offering significant value to our shareholders," Oak Street Health CEO Mike Pykosz said. "Together with CVS Health, we will have access to greater resources and capabilities to expand the reach of our platform, provide more opportunities for our teammates and, most importantly, make a meaningful difference in the lives of the patients we serve.
The deal is pending approval by Oak Health shareholders and regulators, but is expected to close some time this year.
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The deal is CVS Health's latest venture into primary health. Bloomberg reported in October that the company was looking to acquire Cano Health, a Miami-based company that provides care to underserved populations and seniors. At the time, no deal had been reached.
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CVS announced the Oak Health deal the same day they released fourth quarter and full year 2022 results. The company brought in $322.5 billion in total revenue for the year, up 10.4% from the year before.
