- Amazon has agreed to acquire primary care network One Medical for $18 a share, valuing the company at $3.9 billion.
- The all-cash deal for San Francisco-based One Medical comes after months of speculation about a potential acquisition, reportedly drawing interest from companies including CVS Health, according to Bloomberg.
- Analysts said a potential buyout for One Medical, which has grown rapidly since it was founded in 2007, could come at a significant premium. Amazon’s price of $18 a share represents a premium of 43% over its closing price of $10.18 a share on Wednesday.
Amazon has been elbowing into the healthcare industry, including health benefits for employers in a bid to lower sharply rising costs. Two years ago, the e-commerce giant launched a hybrid care program for employers, which includes a virtual care element tied to in-person care in specific locations.
Though Amazon expanded the virtual care program nationwide in February, its in-person benefit has lagged behind, scheduled to be offered in roughly 30 U.S. cities by the end of this year.
Nabbing One Medical, which operates an expansive network of clinics and says it is the largest independent practice in the U.S., could be a bid to bolster the Amazon Care program. Amazon has not yet responded to a request for comment on how One Medical will be folded into its existing healthcare operations.
The Amazon deal comes as somewhat of a surprise to the healthcare sector. Despite the acquisition rumors, One Medical’s cash-burning and riskier Medicare segment could be “unpalatable” for larger tech firms like Amazon, Citi analysts argued earlier this month.
Along with One Medical’s direct-to-consumer medical model, the primary care network has about 8,000 employer clients and offers its services to their employees.
“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,” One Medical CEO Amir Dan Rubin said.
On completion of the deal, Dan Rubin will stay on as head of the division.