CVS Well being (CVS) confirmed Wednesday it’s going to purchase Oak Avenue Well being (OSH) for about $10.6 billion together with debt, after shedding a primary-care bidding warfare to Amazon.com (AMZN) final yr. OSH inventory popped in early commerce and CVS inventory additionally rose.
The all-cash transaction, for $39 a share, is ready to shut in 2023, the businesses stated Wednesday. The Wall Avenue Journal first reported Monday that the businesses have been nearing a deal.
Oak Avenue Well being runs major care facilities for older adults on Medicare and targets underserved communities. CVS is increasing “value-based” choices.
The well being care firm had been looking for an acquisition like Oak Avenue Well being. It tried to purchase One Medical, however Amazon.com (AMZN) ultimately swooped in to amass the first care supplier for $3.9 billion in July 2022.
OSH Inventory, CVS Inventory
Shares of Oak Avenue Well being popped 3.6% to 34.90 in Wednesday’s premarket buying and selling. OSH inventory soared practically 30% on the stock market Tuesday amid the Journal report.
CVS inventory gained 1.7% to 87.44 early Wednesday. Shares had nudged up 0.9% Tuesday.
On Wednesday, CVS additionally reported fourth-quarter earnings. Yr over yr, EPS rose by a penny to $1.99, forward of estimates for $1.92. The corporate guided 2023 EPS of $8.70-$8.90, with the midpoint barely beneath Wall Avenue’s expectations for $8.84.
In 2015, CVS bought pharmacy companies supplier Omnicare for $13 billion. In 2017, the corporate acquired well being insurer Aetna for $69 billion.
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