Amazon to buy primary care provider One Medical for $3.9 billion

Amazon announced Thursday that it will acquire primary care organization One Medical in a deal valued at roughly $3.9 billion, marking another expansion for the retailer into healthcare services.

The Seattle-based e-commerce giant said in a statement that it will acquire One Medical for $18 per share in an all-cash transaction. It’s one of Amazon’s biggest acquisitions, following its $13.7 billion deal to buy Whole Foods in 2017 and its $8.5 billion purchase of Hollywood studio MGM, which closed earlier this year.

One Medical, whose parent company is San Francisco-based 1Life Healthcare, Inc., is a membership-based service that offers virtual care and in-person visits. It also works with more than 8,000 companies to provide its health benefits to employees.

As of March of this year, One Medical had about 767,000 members and 188 doctor offices in 25 markets, according to its first-quarter earnings report, which also showed the company had incurred a net loss of $90.9 million after getting $254.1 million in revenue. The full value of the deal announced Thursday includes One Medical’s debt.

Neil Lindsay, senior vice president of Amazon Health Services, said in a statement that the acquisition is geared toward reinventing the health care “experience” for things like booking appointments and taking trips to the pharmacy.

“We love inventing to make what should be easy easier, and we want to be one of the companies that helps dramatically improve the healthcare experience for years to come,” Lindsay said.

Overall, consumer demand for telemedicine and virtual health care visits has skyrocketed during the COVID-19 pandemic. Payers of health care bills, such as employers and insurers, are also focusing more on improving access to patient care and making sure their patients are aware of their health, see their doctors regularly, and take your recipes.

Health care costs have been rising faster than wages and inflation for years and represent a huge expense for employers who offer coverage. Employers and insurers believe that by connecting people to regular care, they can avoid costly hospital stays or prevent chronic diseases like diabetes from causing bigger problems.

For Amazon, the acquisition deepens its foray into health care services. In 2020, the retail behemoth opened an online pharmacy that allows customers to order medications or prescription refills and have them delivered to their doorstep in a couple of days. Last year, it began offering its Amazon Care telemedicine program to employers across the country.

In morning trading, shares of 1Life Healthcare were up 68% at $17.13.

The deal is subject to regulatory approval. In closing, Amazon said One Medical CEO Amir Dan Rubin would remain in his position.

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