The combined company will leverage VillageMD’s expertise in value-based care and Summit Health-CityMD’s expertise in multispecialty, connected care and will have more than 680 provider locations in 26 markets
VillageMD has agreed to acquire Summit Health-CityMD, a healthcare company that offers primary, speciality, and urgent care, for a total consideration of around $8.9bn.
The transaction will be financed through investments from its existing investor Walgreens Boots Alliance (WBA), and an affiliate of Evernorth, a subsidiary of Cigna.
WBA will invest $3.5bn through an equal blend of debt and equity to support the transaction and will remain the largest shareholder of VillageMD with around 53% ownership.
VillageMD will also receive investment from Cigna’s health services unit Evernorth, in exchange for a minority stake.
WBA CEO Roz Brewer said: “Summit Health-CityMD joining VillageMD is transformational for our US Healthcare segment and reinforces our intent to create greater access to quality healthcare across the care continuum.
“This transaction accelerates growth opportunities through a strong market footprint and a wide network of providers and patients across primary, speciality and urgent care.”
Evernorth CEO Eric Palmer said: “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.”
The transaction will create a combined company that leverages VillageMD’s expertise in value-based care and Summit Health-CityMD’s expertise in multispecialty, connected care.
The combined company will have more than 680 provider locations in 26 markets.
Also, the business combination is expected to enhance WBA’s portfolio of integrated healthcare offerings across the care continuum.
It is expected to be completed in the first quarter of calendar 2023, subject to the Hart-Scott-Rodino Act, and certain other customary closing conditions.
VillageMD CEO and chair Tim Barry said: “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-speciality care for decades.
“Both organisations share a deep commitment to keeping our patients and clinicians at the forefront of what we do to best serve them.”
VillageMD is engaged in providing high-quality, accessible primary care for communities across the country through Village Medical.
It provides the tools, technology, operations, staffing support and industry relationships to deliver high-quality clinical care and better patient outcomes, while reducing the cost of care.
Backed by private equity firm Warburg Pincus, Summit Health operates CityMD as an alternative to hospital emergency department visits, with a strong footprint in the northeast US and Oregon.
Summit Health-CityMD CEO Jeff Alter said: “Summit Health-CityMD and VillageMD are patient-centred 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.
“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.”