CVS seeks private equity funding for Oak Street Health, Bloomberg News reports
5:01 pm Thursday, May 23rd, 2024
(Reuters) -CVS Health Corp has been seeking a private equity partner to fund growth at Oak Street Health, a primary care provider it bought a year ago, Bloomberg News reported on Thursday.
The company has been working with financial advisers to help find capital to back new clinics that will be opened by Oak Street, the report said, citing people familiar with the matter.
The deliberations are in a preliminary stage and the structure could change, while there is no guarantee a deal will be reached, according to the report.
CVS declined a request for comment from Reuters.
A potential CVS-private equity partnership would help lessen the capital investment burden associated with the build out of the Oak Street Health clinic base, Leerink Partners analyst Michael Cherny said in a note.
“Overall, we see this move as prudent on the surface, but need more details on the potential joint venture,” he added.
The U.S. healthcare conglomerate bought Oak Street Health for about $9.5 billion in February last year.
CVS had said in February it planned to nearly double the business to 300 clinics by 2026 and aimed to grow the number of Oak Street patients over time.
(Reporting by Sneha S K in Bengaluru; Editing by Shailesh Kuber)
