Signify Health, Inc. (NYSE: SGFY), a leading value-based healthcare platform that leverages advanced analytics, technology and nationwide healthcare provider networks, announced it has completed the acquisition of Caravan Health, a leader in enabling accountable care organizations (ACOs) to excel in population health management and value-based payment programs.
The combination creates one of the largest national networks of providers engaged in value-based payment models. Signify Health will now enable a broader range of value-based and shared savings models from advanced primary care to specialty care bundles to total cost of care programs. The Company also will now be well-positioned to serve community hospitals, physician practices and clinics – entities who have been slower to adopt episodes of care and bundled payments due to lack of infrastructure to do so. With the completion of this acquisition, Signify Health now will support approximately $10 billion in total medical spend under management.
“Giving providers a multi-payor solution ensures that what they do for one patient can be done for all others, irrespective of coverage or individual characteristics,” said Kyle Armbrester, CEO of Signify Health. “With the combined capabilities of Signify and Caravan, we will be able to give providers what they need – one platform to manage better health outcomes for all of their patients, from a simple condition or procedure to a complex combination and across multiple payors. I’m looking forward to working with our expanded team to unlock these opportunities and help our clients bring their value-based care strategies to scale – and improve health outcomes across a range of payment models.”
Pursuant to the agreement previously announced on February 10, 2022, the transaction is valued at an initial purchase price of $250 million, consisting of $190 million in cash and $60 million in Signify Health common stock. The transaction also includes contingent additional payments of up to $50 million in cash based on the future performance of Caravan Health, which was backed by VSS Capital Partners. Signify Health intends to provide guidance for the combined company when it reports its financial results for the fourth quarter and full year 2021 results on March 2, 2022.
About Signify Health
Signify Health is a leading healthcare platform that leverages advanced analytics, technology, and nationwide healthcare provider networks to create and power value-based payment programs. Our mission is to transform how care is paid for and delivered so that people can enjoy more healthy, happy days at home. Our solutions support value-based payment programs by aligning financial incentives around outcomes, providing tools to health plans and healthcare organizations designed to assess and manage risk and identify actionable opportunities for improved patient outcomes, coordination and cost-savings. Through our platform, we coordinate what we believe is a holistic suite of clinical, social, and behavioral services to address an individual’s healthcare needs and prevent adverse events that drive excess cost, all while shifting services towards the home. For more information on how we are taking health homeward, visit us at signifyhealth.com.
The M&A market for healthcare companies continues to strengthen in 2022 ahead of projected increases in US capital gains taxes. There is unprecedented capital in market, the lowest interest rates in US history and strong acquirer motivations for high quality healthcare companies. Across the continuum of care, buyers and investors are looking for well established, profitable businesses and offering strong valuations and options for management.
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