CVS Is in Exclusive Talks to Buy Cano Health

Michelle F. Davis, Bloomberg News

CVS Health Corp. signage is displayed outside a store in downtown Los Angeles, California, U.S., on Friday, Oct. 27, 2017. The prospect of Amazon.com Inc. entering the healthcare business is beginning to cause far-reaching reverberations for a range of companies, roiling the shares of drugstore chains, drug distributors and pharmacy-benefit managers, and potentially precipitating one of the biggest corporate merger deals this year. , Bloomberg

(Bloomberg) -- CVS Health Corp. is in exclusive talks to buy Cano Health Inc., the health-care provider backed by billionaire Barry Sternlicht, according to people familiar with the matter.

CVS is currently conducting due diligence on the Miami, Florida-based company, said the people, who asked to not be identified because the matter isn’t public. There is no certainty a deal will be reached, in part because Humana Inc. has a right of first refusal should Cano find a buyer under an agreement they made in 2019, said the people.

Representatives for CVS and Cano declined to comment.

Cano rose 7.3% to $9.48 at 10:07 a.m. in New York trading Friday, giving the company a market value of about $4.6 billion.

Cano operates primary care facilities and supports medical practices that cater to seniors in states including Florida, Texas and Nevada, according to its website.

The company listed on the New York Stock Exchange last year through a merger with a special purpose acquisition company sponsored by Sternlicht, who leads Starwood Capital Group Management.

CVS, a major drugstore operator, has been expanding more directly into health care via acquisitions, agreeing last month to buy Signify Health Inc. Its largest deal in the space was the purchase in 2018 of insurer Aetna Inc. in a deal valued at $68 billion, including debt. That transaction followed its 2007 acquisition of Caremark RX Inc. for about $27 billion.

CVS has said it wants to make health care more convenient, personalized and affordable for consumers and last year said it planned to partner with doctors or potentially acquire primary care practices.

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