Weeks ago, Amazon (AMZN) announced it would acquire One Medical for $3.9 billion.
“The opportunity to transform health care and improve outcomes by combining One Medical’s human-centered and technology-powered model and exceptional team with Amazon’s customer obsession, history of invention, and willingness to invest in the long-term is so exciting,” said Amir Dan Rubin, One Medical CEO. “There is an immense opportunity to make the health care experience more accessible, affordable, and even enjoyable for patients, providers, and payers.”
Then, over the last weekend, CVS said it would acquire Signify Health for $8 billion.
“This acquisition will enhance our connection to consumers in the home and enables providers to better address patient needs as we execute our vision to redefine the health care experience,” CVS Health President and CEO Karen Lynch said in a news release.
That could open up potential opportunities for other related companies, like Cano Health (CANO) and even Oak Street Health (OSH), which we mentioned on August 25.
In fact, around that time, there was word that Owl Creek Asset Management wants Cano Health (CANO) to “pursue strategic alternatives.” Owl Creek even noted:
“Given the persistent and wide gap between where Cano shares trade and the valuation of comparable companies, we believe there is ample room to come to terms with a strategic buyer that maximizes value for shareholders and provides the Company a platform for future growth. The industry is ripe for consolidation.”
“Recent transactions support this assertion and the willingness of buyers to pay a meaningful premium to where Cano’s stock has traded for much of this year. For example, as recently as July, Amazon.com Inc. announced that it was buying 1Life Healthcare Inc. for $3.9 billion. Amazon is paying well over three times this year’s expected revenue of One Medical…”
In short, we could still see far more M&A in the space.