Walgreens is considering buying health IT company Evolent Health, according to a recent report by Bloomberg. The talks are ongoing and a deal isn’t certain, the report noted, citing anonymous sources.
Arlington, Virginia-based Evolent makes software to help providers with cost and quality improvements. After going public in 2015, the company has recently faced pressure from activist investor Engaged Capital, which has a 10% stake in the company.
Evolent currently has a market cap of $2.82 billion, with most of its revenue coming from its software services business. It had previously operated a health plan in New Mexico, True Health, but sold it to Bright Health earlier this year as Engaged Capital urged it to focus more on its services business.
Evolent’s stock rose more than 18% on the rumored acquisition, from $27 on Tuesday to more than $32 on Monday. Neither Evolent nor Walgreens responded to requests for comment at the time of publication.
If the deal closes, it would broaden Walgreens’ relationships with payers, helping it compete with CVS, which acquired Aetna in 2018. Walgreens has been changing its strategy as it looks to open hundreds of primary care clinics attached to its stores and pay down its debt, both of which could be funded by its $6.5 billion sale of its wholesale pharmacy business.
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