CVS Health Corp. is planning to submit a bid to acquire Dallas-based Signify Health Inc. as part of an expansion into home-health services, the Wall Street Journal reported, citing people familiar with the matter.

CVS, which has drug stores and provides health insurance, is among the companies seeking to submit initial bids this week, the Journal reported Sunday. The Journal said Signify, which had a stock-market capitalization of $4.66 billion as of Friday, was exploring strategic alternatives including a possible sale.

There’s no guarantee that the activity will culminate in a sale for Signify, the Journal reported. Representatives of CVS and Signify declined to comment on the deal speculation in emails to Bloomberg.

Purchasing a home-health company would align with Chief Executive Officer Karen Lynch’s goal of moving CVS toward more types of direct care with patients. Competition is mounting with Amazon.com Inc.’s recent deal to acquire primary-care clinic company One Medical.

“We have been deliberate about our approach, which is meeting customers in the home, in the community, and through digital connections,” Lynch said in an interview last week with Bloomberg News. “So our strategy is to really meet consumers where they are.”

Signify has a platform that uses technology and analytics to support home health-care providers.

The company announced in July that it was exiting the bundled health insurance payments business, a move the company expected to cost up to $35 million in severance and other employee payouts.

Signify said it planned to concentrate on what it considers a fast-growing and more profitable sector — home health. Following the onset of the COVID-19 pandemic, health care providers saw a growth in demand for home services, particularly for vulnerable populations that didn’t feel safe going to a doctor or hospital for fear of catching the virus.

Signify’s home and community service division, bolstered by a $250 million acquisition of Caravan Health earlier this year, has benefited from that increased demand. The company offers remote patient monitoring, distribution channels, member engagement and care optimization to health care providers offering in-home care.

The Caravan Health deal united two companies focused on value-based payment models for everything from advanced primary care to specialty care bundles to total cost of care contracts. It created a large national network of physicians, nurse practitioners and licensed social care workers reaching more than 2 million homes, Signify’s CEO Kyle Armbrester told Fierce Healthcare at the time.

“What we’re building out is going to be something that actually finally enables a health system to take on value-based care,” Armbrester told the publication.

Signify’s shares have risen 40% so far this year, closing at $19.87 on Friday.

Signify closed 2021 with revenue of $773.4 million, a 27% increase from 2020. It went public last year with a market capitalization of $7.12 billion after raising $564 million on its opening day.

Kevin Miller and Julie Johnsson, Bloomberg, and Dallas Morning News research.

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