(Bloomberg) -- Signify Health Inc. rose the most in nine months after a report that CVS Health Corp. is planning to submit a bid to acquire the provider of technology and services for home health.
CVS, which runs drugstores and provides health insurance, is among the companies seeking to submit initial bids this week, the Wall Street Journal wrote Sunday. The Journal reported last week that Signify, which had a stock-market capitalization of $4.66 billion as of Friday, was exploring strategic alternatives including a possible sale.
Signify shares rose as much 18% Monday in New York, their biggest intraday gain since November. CVS fell 0.5% as of 12:32 p.m.
Through its software and services, Signify aims to help clients -- payers like health plans, government programs and employers -- shift to value-based payment plans. These arrangements are intended to improve care and reduce spending by treating patients in lower-cost settings and linking providers’ payments to patient outcomes. An acquisition may align with CVS Chief Executive Officer Karen Lynch’s move toward more interaction with patients, including primary care locations in its chain of drugstores.
“We have been deliberate about our approach, which is meeting customers in the home, in the community, and through digital connections,” Lynch said in an interview last week with Bloomberg News. “So our strategy is to really meet consumers where they are.”
Concerns about competition in primary care are mounting with Amazon.com Inc.’s recent deal to acquire primary-care clinic company One Medical. The deal announced July 21 will give Amazon relationships with hundreds of thousands of patients, their employers and brick-and-mortar clinics in major cities across the US.
Signify has a network of more than 10,000 independently contracted doctors and nurse practitioners, according to a company filing. They evaluated more than 1.9 million patients in private Medicare Advantage and other managed care plans last year.
There’s no guarantee that the activity will culminate in a sale for Signify, the Journal reported. Representatives of CVS and Signify declined to comment on the deal speculation in emails to Bloomberg.
Signify said in July that it was winding down its Episodes of Care Services unit, citing uncertainty over government payment methods, to focus on its Home and Community Services unit.
Signify is run from a headquarters in Dallas, while its US filings list Norwalk, Connecticut, as its principal executive office.
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