CVS Health Corp. (NYSE: CVS) is not one of the biggest names that investors generally think of when it comes to multi-billion capital raises. So what happens when you see a filing with the U.S. Securities and Exchange Commission (SEC) for $20 billion in debt?
CVS’s S-3 registration was filed to increase the registration by $10 billion, which it can issue in SEC-registered transactions. CVS already had $10 billion of debt securities registered with the SEC.
The filing also says that the funds raised will be used for general corporate purposes. Still, that is effectively to help pay for M&A. What happened here is that CVS appears to have raised additional debt to help it pay for acquisitions.
The filing shows that CVS Pharmacy entered into a merger agreement to acquire Omnicare. This is a pharmacy services provider to long-term care facilities, as well as specialty pharmacy and key commercialization services. CVS said in this filing that it has secured $13 billion in fully committed unsecured bridge financing in connection with the Omnicare merger.
The filing also showed that CVS entered into a merger agreement on June 12, 2015, with Target to acquire its pharmacy and clinic businesses for a cash purchase price of $1.887 billion.
CVS has a market cap of almost $120 billion currently. As of March 31, 2015, CVS had over $1.6 billion in cash and short-term investments and about $11.7 billion in long-term debt.
This hardly seems like a stock moving event — shares are up 0.26% on the day to $106.42 Tuesday. CVS has a 52-week range of $74.64 to $106.68. The consensus analyst price target is $116.24.
How many times to do you see $20 billion debt offering registrations filed?
ALSO READ: 10 Companies to Own for the Next Decade
100 Million Americans Are Missing This Crucial Retirement Tool
The thought of burdening your family with a financial disaster is most Americans’ nightmare. However, recent studies show that over 100 million Americans still don’t have proper life insurance in the event they pass away.
Life insurance can bring peace of mind – ensuring your loved ones are safeguarded against unforeseen expenses and debts. With premiums often lower than expected and a variety of plans tailored to different life stages and health conditions, securing a policy is more accessible than ever.
A quick, no-obligation quote can provide valuable insight into what’s available and what might best suit your family’s needs. Life insurance is a simple step you can take today to help secure peace of mind for your loved ones tomorrow.
Click here to learn how to get a quote in just a few minutes.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.