Dive Brief:
- Staffing technology company Cross Country Healthcare has entered into an agreement to be acquired by private equity firm Knox Lane in an all-cash deal worth $437 million.
- The acquisition, which will take Cross Country private, values the company at $13.25 per share, a 31% premium over the staffing firm’s closing stock price on Wednesday, according to a press release. It’s expected to close in the third quarter if the deal clears regulatory approval.
- The deal comes months after Cross Country and travel nursing agency Aya Healthcare abandoned plans to combine following antitrust scrutiny from the Federal Trade Commission.
Dive Insight:
Founded 40 years ago, Cross Country offers staffing services for healthcare workers, including travel nurses, temporary physicians and school professionals, as well as technology to help providers manage their workforces.
Its acquirer Knox Lane is a private equity firm with $3.5 billion in assets under management, according to its website. The firm’s portfolio includes some healthcare companies, such as fellow staffing company All Star Healthcare and HCEsquared, which provides medical education services to biopharma companies.
The need for temporary staffing and travel nurses surged during the COVID-19 pandemic, as hospitals grappled with increased capacity strain and burnout among providers. Those temporary staffers were pricey, and — even as reliance on contract workers has abated — demand continues to be elevated and labor remains a major expense for health systems.
The latest purchase agreement follows another attempt by Cross Country to be acquired. In late 2024, Cross Country announced it had entered into an agreement to be purchased by Aya for $615 million. The companies said the deal would have extended Aya’s technology services into non-clinical settings like schools while solidifying the companies’ reach into healthcare staffing.
However, the FTC had questions about the deal, which would have combined two of the nation’s largest healthcare staffing firms. The regulator said it had "significant competitive concerns” about the acquisition, arguing consolidation would have increased hospitals’ expenses and patients’ healthcare costs.
The closing date for the purchase was extended, but the regulator’s review period butted up against the weekslong federal government shutdown last year. Ultimately, Cross Country was unable to reach a deal with Aya to extend the closing date again, and the agreement fell apart in December.
Cross Country’s CEO John Martins stepped down shortly after the deal fell apart, and the firm’s co-founder and chairman Kevin Clark returned to the role.
The latest purchase agreement comes as Cross Country reported a declining top line in first-quarter results released Thursday. The staffing company posted revenue of $241.1 million in the quarter, down 18% year over year. It reported a net loss of $4.3 million, compared with a loss of $500,000 during the prior-year quarter.
If this week’s deal falls through, the terminating party will need to pay the other company a one-time fee of $14.2 million, according to a securities filing.
