Dive Brief:
- Premier is going private through an acquisition by healthcare-focused investment firm Patient Square Capital, the companies announced Monday.
- The deal values Premier at roughly $2.6 billion and is set to take the company, which provides supply chain, technology and consulting services to thousands of U.S. providers, off the public markets after more than a decade.
- Premier and Patient Square expect the deal to close by the first quarter of 2026 subject to regulatory approval and other closing conditions.
Dive Insight:
Premier offers a panoply of services to healthcare organizations, including through a platform providing supply chain, clinical, financial, operational and value-based care support. The company, which counts more than two-thirds of U.S. providers as customers, also operates one of the largest group purchasing organizations in the U.S., with $87 billion in purchasing power during the last calendar year.
Under the terms of the deal with Patient Square, Premier stockholders will receive $28.25 in cash per share, which the company said represents an almost 24% premium over its average stock price over the two months prior to Sept. 5.
The premium shrinks to about 9.7% when compared to the company’s closing price on Friday, the last day of trade before the acquisition was announced.
In statements, Premier’s leadership said that the go-private deal will deliver value to shareholders while giving Premier access to more capital to bolster its operations and offerings, especially in technology.
“As the health care landscape continues to rapidly evolve, transitioning to private ownership will once again enhance the Company’s financial flexibility and provide additional resources to accelerate the advancement and tech-enablement of our product portfolio, capitalize on emerging opportunities and continue pushing the envelope of innovation,” Premier CEO Michael Alkire said in the press release.
Menlo Park, California-based Patient Square manages more than $14 billion in assets. Its portfolio companies include ChenMed, a value-based primary care provider for Medicare Advantage patients; Elevage, a company supports medical device approval and commercialization; and acute care telemedicine provider Access Telecare.
Most recently, in April Patient Square finalized its acquisition of Patterson Companies, a firm that supplies products to the dental and animal health markets.
And now, the investment firm is taking on Premier, an operator with massive reach in the healthcare system but one that’s struggled with contracting finances amid economic headwinds hitting its provider base.
Premier brought in $20.3 million in net income on $1 billion in revenue in its most recent fiscal year — down 83% and 11% year over year, respectively.
In 2023, Premier retained advisors to explore strategic options, including a potential sale. Soon after, the company offloaded its non-healthcare group purchasing operations to GPO Omnia Partners for roughly $800 million in cash.
Premier zeroed in on more assets to sell after completing its strategic review in early 2024, including direct sourcing subsidiary S2S Global and employee health benefits subsidiary Contigo Health.
Premier sold holdings in S2S Global for a 20% minority interest in personal protective equipment manufacturer Prestige Ameritech in October; and sold Contigo’s wrap network business for $15 million to claims payment company Direct Pay AG in January.
Though Premier continues to own Contigo’s remaining businesses, including its center of excellence, the company expects to divest or wind them down by the end of 2025, the company said in an August securities filing.
Premier’s board unanimously approved its sale to Patient Square.
