With Investments from WBA and Evernorth, the
Combined Company Will Deliver a Unique and Comprehensive Patient
Experience for Optimal Individual and Community Outcomes
VillageMD announced today it has entered a definitive agreement
to acquire Summit Health-CityMD, a leading provider of primary,
specialty and urgent care. The transaction is valued at
approximately $8.9 billion with investments from Walgreens Boots
Alliance, Inc. (Nasdaq: WBA) and an affiliate of Evernorth, a
subsidiary of Cigna Corporation (NYSE:CI).
Together, VillageMD and Summit Health-CityMD will create a
multi-payor platform to deliver quality, affordable care for all
patients. The combined company leverages VillageMD’s deep expertise
in value-based care to support and accelerate the transition to
more risk-based care and Summit Health-CityMD’s longstanding and
deep expertise delivering multispecialty, connected care. It also
enhances WBA’s robust portfolio of leading, integrated healthcare
offerings across the care continuum.
Summit Health-CityMD has a strong footprint in the northeast
United States and Oregon. Together, VillageMD and Summit Health
will have more than 680 provider locations in 26 markets.
“This is an epic milestone in our journey to transform
healthcare in the United States. Summit Health-CityMD has been a
leader in delivering coordinated, multi-specialty care for decades.
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,” said Tim Barry, CEO and Chair
of VillageMD. “Both organizations share a deep commitment to
keeping our patients and clinicians at the forefront of what we do
to best serve them.”
“Summit Health-CityMD and VillageMD are patient-centered and
physician-led companies that have complementary offerings and a
shared core belief that taking excellent care of the patient will
remain the cornerstone of our success,” said Jeff Alter, CEO of
Summit Health-CityMD. “Adding our expertise and geographic coverage
to VillageMD’s proven value-based primary care approach will
enhance the lives of so many patients and physicians across the
country, helping to lower healthcare costs and improve the health
of our communities. We are incredibly excited about the potential
of these combined companies. I would also like to thank our
incredible team of clinicians and support staff for their daily
dedication to our patients, and to Warburg Pincus for their support
and partnership.”
“Summit Health-CityMD joining VillageMD is transformational for
our U.S. Healthcare segment and reinforces our intent to create
greater access to quality healthcare across the care continuum,”
said Roz Brewer, CEO, WBA. “This transaction accelerates growth
opportunities through a strong market footprint and wide network of
providers and patients across primary, specialty and urgent
care.”
Acceleration of Walgreens Boots Alliance’s U.S. Healthcare
Segment
WBA will invest $3.5 billion through an even mix of debt and
equity to support the acquisition of Summit Health-CityMD, which
drives meaningful synergies and accelerates WBA’s path to
profitability for its U.S. Healthcare segment. WBA will remain the
largest and consolidating shareholder of VillageMD with
approximately 53 percent ownership. The company expects to maintain
an investment grade rating.
As a result of the transaction, WBA is raising its U.S.
Healthcare fiscal year 2025 sales goal to $14.5 billion to $16.0
billion, from $11.0 billion to $12.0 billion previously. WBA’s U.S.
Healthcare segment is now expected to achieve positive adjusted
EBITDA by the end of fiscal year 2023. Assuming a Jan. 1, 2023
closing date, WBA is raising the U.S. Healthcare adjusted EBITDA
target for fiscal year 2023 to $(50) million to $25 million, from
$(240) million to $(220) million previously.
The transaction will be slightly accretive to WBA adjusted EPS
in fiscal year 2023, and accretive by $0.07 to $0.11 in fiscal year
2024 and increasing thereafter.
For further details, refer to WBA’s 8-K filing.
Strategic Collaboration with Evernorth
Evernorth, Cigna Corporation’s health services organization that
creates and connects benefits, pharmacy and care solutions, will
also be a minority owner in VillageMD. The collaboration is part of
Evernorth’s commitment to accelerating value-based services that
deepen relationships with high-performing primary care physicians
and specialists to improve outcomes and lower costs.
“Our collaboration with VillageMD accelerates our efforts to
improve the way care is accessed and delivered,” said Eric Palmer,
CEO of Evernorth. “Harnessing the breadth of Evernorth’s health
services capabilities and connecting them with physicians who
provide care in a value-based model like VillageMD, helps more
people to get the right care at the right time – driving better
health and value.”
The transaction is subject to the expiration or termination of
the applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and other customary closing
conditions. It is expected to close in the first quarter of
calendar 2023.
About VillageMD
VillageMD is committed to offering high-quality, accessible
primary care options for communities across the country through
Village Medical. VillageMD partners with physicians to provide the
tools, technology, operations, staffing support and industry
relationships to deliver high-quality clinical care and better
patient outcomes, while reducing the total cost of care. The
Village Medical brand provides value-based primary care for
patients at traditional free-standing practices, Village Medical at
Walgreens practices, at home and via virtual visits. VillageMD and
Village Medical have grown to 22 markets and are responsible for
more than 1.6 million patients. To learn more, please visit
www.villageMD.com.
About Summit Health-CityMD
Summit Health-CityMD helps patients with all of their primary
and specialty care needs. Whether it’s getting annual checkups,
raising a family, or prioritizing healthy aging, Summit Health
works as a team to deliver care that helps patients make the right
choices and stay a step ahead of any issues. Exceptional doctors
are committed to providing the best care and supporting patients
over a lifetime. And if patients ever need urgent care, they can
walk right in to CityMD, whose providers are part of the connected
care team. Together, Summit Health and CityMD have more than 2,800
providers across more than 370 locations in New York, New Jersey,
Connecticut, Pennsylvania, and Central Oregon. To learn more, visit
summithealth.com.
About Walgreens Boots Alliance
Walgreens Boots Alliance (Nasdaq: WBA) is an integrated
healthcare, pharmacy and retail leader serving millions of
customers and patients every day, with a 170-year heritage of
caring for communities.
A trusted, global innovator in retail pharmacy with
approximately 13,000 locations across the U.S., Europe and Latin
America, WBA plays a critical role in the healthcare ecosystem. The
company is reimagining local healthcare and wellbeing for all as
part of its purpose – to create more joyful lives through better
health. Through dispensing medicines, improving access to a wide
range of health services, providing high quality health and beauty
products and offering anytime, anywhere convenience across its
digital platforms, WBA is shaping the future of healthcare.
WBA employs more than 325,000 people and has a presence in nine
countries through its portfolio of consumer brands: Walgreens,
Boots, Duane Reade, the No7 Beauty Company, Benavides in Mexico and
Ahumada in Chile. Additionally, WBA has a portfolio of
healthcare-focused investments located in several countries,
including China and the U.S.
The company is proud of its contributions to healthy
communities, a healthy planet, an inclusive workplace and a
sustainable marketplace. WBA has been recognized for its commitment
to operating sustainably: the company is an index component of the
Dow Jones Sustainability Indices (DJSI) and was named to the 100
Best Corporate Citizens 2022.
More company information is available at
www.walgreensbootsalliance.com.
About Cigna
Cigna Corporation (NYSE: CI) is a global health services company
dedicated to improving the health, well-being and peace of mind of
those we serve. Cigna delivers choice, predictability,
affordability and access to quality care through integrated
capabilities and connected, personalized solutions that advance
whole person health. All products and services are provided
exclusively by or through operating subsidiaries of Cigna
Corporation, including Cigna Health and Life Insurance Company,
Connecticut General Life Insurance Company, Evernorth companies or
their affiliates, and Express Scripts companies or their
affiliates. Such products and services include an integrated suite
of health services, such as medical, dental, behavioral health,
pharmacy, vision, supplemental benefits, and other related
products.
Cigna's global footprint spans approximately 30 countries and
jurisdictions, and has over 190 million customer relationships
throughout the world. To learn more about Cigna®, including links
to follow us on Facebook or Twitter, visit www.cigna.com.
(WBA-GEN)
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version on businesswire.com: https://www.businesswire.com/news/home/20221107005718/en/
Molly Lynch 773-505-9719 mlynch@villagemd.com Kelli Teno
224-237-4526 kelli.teno@wba.com Joy Lee-Calio 908-977-9502
jleecalio@summithealth.com Justine Sessions 860-810-6523
Justine.Sessions@cigna.com
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