VillageMD announced a blockbuster deal Monday to buy Summit Health-CityMD, a provider of primary, urgent and specialty care, for $8.9 billion. Walgreens Boots Alliance, VillageMD’s largest shareholder, is kicking in $3.5 billion for the acquisition, and Cigna Corporation will also become a minority partner in VillageMD.
The combined company will leverage VillageMD’s expertise in value-based in-home care to support and accelerate the transition to more risk-based care and Summit’s expertise delivering multispecialty, connected care. Summit Health-CityMD’s footprint is in the Northeast and Oregon, while VillageMD is in 22 markets scattered throughout the U.S. The combined company will have more than 680 provider locations.
VillageMD CEO Tim Berry called the deal an epic milestone in the company’s effort to transform healthcare.
“We are honored to work side-by-side with their 13,000 strong workforce who are passionately committed to delivering the best outcomes for millions of patients,” Berry said in a statement. “Both organizations share a deep commitment to keeping our patients and clinicians at the forefront of what we do to best serve them.”
Morningstar healthcare analyst Julie Utterback told McKnight’s Home Care Daily Pulse that it is difficult to say if the deal will substantially move more care into the home, but she said it will help Walgreens “grow its healthcare service operations.”
Walgreens CEO Roz Brewer said in a statement the deal reinforces the company’s intent to create greater access to healthcare and help Walgreens “accelerate growth opportunities.”
Brewer telegraphed that a mega-deal like Summit Health was on the horizon during an earnings call last summer when she told analysts Walgreens was looking for an acquisition that would push it further into the community and into customers’ homes. The acquisition of Summit eclipses CVS Health’s recent deal to acquire tech-enabled home care firm Signify Health by roughly $1 billion.
Both Walgreens and CVS Health are trying to transform themselves from large retail pharmacies into more holistic healthcare firms that reach into patients’ homes.
The VillageMD-Summit deal is subject to shareholder and regulatory approval. VillageMD hopes to complete the acquisition sometime during the first quarter of 2023.