SGFY Stock Alert: CVS Will Acquire Signify Health for $8 Billion

  • Signify Health (SGFY) stock is in focus on news that CVS (CVS) plans to acquire the company.
  • CVS will buy shares at a value of $30.50 each.
  • That values the entirety of Signify at about $8 billion.
A photo of the CVS logo over the door of one of its stores representing SGFY stock news.

Source: Shutterstock

Signify Health (NYSE:SGFY) stock is on the move Tuesday after CVS (NYSE:CVS) revealed plans to acquire the healthcare platform company.

This will have CVS spending $30.50 per share to acquire SGFY stock. That represents a roughly 6% premium to the stock’s closing price on Friday. It also values Signify Health at roughly $8 billion.

According to CVS, it will fund the deal with “cash from its balance sheet” and resources currently available. The company also notes that it will do so while continuing to maintain its credit rating.

Shawn Guertin, Vice President and CFO of CVS, said the following about the deal:

“This is a major step as we continue to execute on our strategy […] We expect the acquisition to be meaningfully accretive to earnings and, as a result, are increasingly confident we can achieve our long-term adjusted EPS goals as outlined at our Investor Day in December 2021.”

Of course, the acquisition still requires the approval of regulators and shareholders. New Mountain Capital, however — which owns roughly 60% of SGFY stock — has agreed to vote in favor of the deal. If all goes well, the acquisition will close in the first half of 2023.

SGFY stock is seeing heavy movement on today’s news. This has more than 19 million shares trading hands as of this writing. For comparison, the company’s daily average trading volume is closer to 2.4 million shares.

SGFY stock is up slightly as of Tuesday morning.

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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


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