Speaking at the Goldman Sachs Healthcare Conference on June 11, Mr. Evanko said any potential acquisitions the company considers must be strategically and financially attractive and have a high probability of closing.
“If all three of those criteria are not met, we will not pursue inorganic activity,” Mr. Evanko said. “We don’t need to do M&A either. When we talk about our [earnings per share] algorithm of 10% to 14% over time, we’re fully confident in our ability to do that the way the company is right now. So M&A would be an accelerant in the right circumstances or the right instance.”
Cigna has taken a different approach to some payers when it comes to acquisitions — preferring to strike agreements with providers rather than acquire them.
“For some time, we’ve said we don’t think we’re necessarily good owners of physical care delivery,” Mr. Evanko, who is also CEO of Cigna Healthcare, the company’s insurance segment, said. “Going forward, we continue to believe that’s the case.”
Cigna called off a proposed merger with Humana in December. Though the deal is off, some analysts have speculated a deal could still be possible.
“The math now works for a [Cigna and Humana] fusion,” Jeffries analyst David Windley wrote in April. Since the two companies abandoned a proposed merger in December, Cigna’s stock prices have risen while Humana’s have fallen.
Cigna is also planning to exit the Medicare Advantage business. In January, the company reached a deal to sell its Medicare business to Health Care Service Corp. for $3.3 billion.
Mr. Evanko told investors the company expects to put most of the proceeds from the deal, which is pending regulatory approval, toward stock buybacks.
