- Walgreens is buying the remaining 45% stake in post-acute and home care services provider CareCentrix for roughly $392 million, the pharmacy giant said Tuesday.
- Walgreens acquired a 55% majority stake in CareCentrix, which coordinates home care for health plans, patients and medical providers, for $330 million in a deal that closed earlier this year.
- The Illinois-based retailer has said the buy will expand its reach in the health sector, especially in the fast-growing areas of primary care, specialty pharmacy, post-acute and home care.
Care delivery is increasingly shifting away from the pricey inpatient setting as consumers seek out less expensive options in the community and at home. The trend is expected to accelerate as the senior population grows, escalating demand and spurring investment in the at-home care market.
CareCentrix manages the care of more than 19 million members at home and through about 7,400 provider locations. The company provides services like home nursing, durable medical equipment, home infusion and in-home palliative care, and delivered $1.5 billion in sales in Walgreens’ 2021 fiscal year, according to the release.
Walgreens plans to integrate CareCentrix’s data analytics and home care work with its own portfolio of health solutions, which include specialty pharmacy company Shields Health Solutions and primary care network VillageMD.
The integration could allow Walgreens to support medication reconciliation for CareCentrix patients, and provide primary care options. CareCentrix will also help Walgreens Health manage population-level risk for benefits management and post-acute spend, Walgreens has said in previous comments on the deal.
The transaction that closed in August valued CareCentrix at $800 million. Walgreens didn’t provide an updated valuation for the company.
In a statement, Walgreens CEO Rox Brewer said the company has seen strong results from its partnership with CareCentrix, and its full acquisition “further accelerates our transformation to become a consumer-centric healthcare company.”
CareCentrix will continue to operate as a distinct business and brand under Walgreens. Its CEO John Driscoll will assume a new role as leader of U.S. Healthcare for Walgreens later this month.
U.S. Healthcare encompasses Walgreens’ other healthcare partners, including VillageMD, Shields Health Solutions and CareCentrix, along with the Walgreens Health business, which focuses on population health initiatives.
CareCentrix CFO Steve Horowitz will become CareCentrix’s CEO.
Walgreens expects the acquisition to close by March. It’s the latest move by a retail health provider in the ongoing race to build out outpatient footprints, as companies including CVS, Walmart, Walgreens and Amazon jockey for market share in the growing space.
It also comes a month after CVS announced it was acquiring home care company Signify Health for $8 billion, beating out Amazon and other potential buyers.