CVS Health (CVS) confirmed Wednesday it will buy Oak Street Health (OSH) for about $10.6 billion including debt, after losing a primary-care bidding war to Amazon.com (AMZN) last year. OSH stock popped in early trade and CVS stock also rose.
The all-cash transaction, for $39 a share, is set to close in 2023, the companies said Wednesday. The Wall Street Journal first reported Monday that the companies were nearing a deal.
Oak Street Health runs primary care centers for older adults on Medicare and targets underserved communities. CVS is expanding “value-based” offerings.
The health care company had been hunting for an acquisition like Oak Street Health. It tried to buy One Medical, but Amazon.com (AMZN) eventually swooped in to acquire the primary care provider for $3.9 billion in July 2022.
OSH Stock, CVS Stock
Shares of Oak Street Health popped 3.6% to 34.90 in Wednesday’s premarket trading. OSH stock soared nearly 30% on the stock market Tuesday amid the Journal report.
CVS stock gained 1.7% to 87.44 early Wednesday. Shares had nudged up 0.9% Tuesday.
CVS Earnings
On Wednesday, CVS also reported fourth-quarter earnings. Year over year, EPS rose by a penny to $1.99, ahead of estimates for $1.92. The company guided 2023 EPS of $8.70-$8.90, with the midpoint slightly below Wall Street’s expectations for $8.84.
In 2015, CVS purchased pharmacy services provider Omnicare for $13 billion. In 2017, the company acquired health insurer Aetna for $69 billion.
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