VillageMD Completes $8.9B Acquisition of Summit Health-CityMD

Editor's note: a previous version of this story incorrectly stated that the transaction's value was $8.9 million instead of $8.9 billion.

VillageMD has finalized its $8.9 billion acquisition of Summit Health-CityMD, creating one of the largest independent provider groups in the country.

VillageMD announced in November 2022 that it had entered a definitive agreement to acquire the primary, specialty, and urgent care provider organization. The $8.9 billion transaction included investments from Walgreens Boots Alliance, Inc. and Evernorth, Cigna Corporation’s health services business.

“Our new organization will continue to be patient-centered, physician-led, and committed to transforming the way healthcare is delivered in the United States,” Tim Barry, chief executive officer and chair of VillageMD, said in the press release. “As we combine forces, our workforce of 20,000 people will have even more expertise, tools, and resources to provide the best care for our patients – whenever and wherever care is needed.”

The merged medical group will have more than 680 provider locations in 26 markets. The acquisition combines VillageMD’s value-based care model with Summit Health-CityMD’s experience delivering multispecialty and connected care.

“Providing high-quality care with a focus on clinical outcomes in an exceptional patient experience is in the DNA of both organizations,” Barry added. “Together, we are poised to deliver on the promise of value-based care for more communities, families, and individuals.”

VillageMD provides value-based primary care for patients at traditional free-standing practices, Village Medical at Walgreens, and via virtual visits. Prior to the acquisition, VillageMD and Village Medical had expanded to 22 markets and served more than 1.6 million patients.

Summit Health-CityMD initially had more than 2,800 providers across 370 locations in New York, New Jersey, Connecticut, Pennsylvania, and Central Oregon. The organization was formed after Summit Health and CityMD merged in August 2019.

VillageMD is conducting a national search for a president of the merged provider group, who will report directly to Barry. The current chair and former chief executive officer of Summit Health, Jeffrey Le Benger, MD, will act as the interim president.

In the third quarter of 2022, healthcare merger and acquisition activity was low, with 10 transactions generating $8.3 billion in revenue. Two of the transactions were considered mega deals, in which the smaller entity’s annual revenues exceeded $1 billion.

Merger and acquisition revenue hit a record high in Q2 of 2022, with 13 transactions generating $19.2 billion—two of which were mega deals.

Despite facing headwinds in 2022, experts have predicted that the healthcare industry, including the health services and pharmaceutical sectors, will see substantial merger and acquisition activity in 2023.