CVS Buys Primary Care Provider Oak Street Health in $10.6B Deal

After weeks of rumors, CVS Health announced plans to acquire Oak Street Health, a primary care provider geared toward the Medicare population, in an all-cash deal worth approximately $10.6 billion, or $39 per share.

CVS said Oak Street’s model, which is tech-enabled, multi-payor and value-based, has proven to be scalable, making it an attractive target. CVS expects the merger to drive more than $500 million in synergy potential over time, bolstering its long-term growth goals.

Chicago-based Oak Street Health runs 169 clinics in 21 states, employing about 600 primary care providers. CEO Mike Pykosz will continue to lead the company upon close, which the companies expect this year.

“Combining Oak Street Health’s platform with CVS Health’s unmatched reach will create the premier value-based primary care solution,” said CVS Health CEO Karen Lynch. “Enhancing our value-based offerings is core to our strategy as we continue to redefine how people access and experience care that is more affordable, convenient and connected.”

The announcement follows another huge deal for CVS – the planned purchase of home care platform Signify Health for $8 billion – which is currently under regulatory review.