mazon.com Inc. said it was buying One Medical, a health-care startup for $18 per share. It is this latest effort by mazon.com Inc. to enter the market in the area of healthcare.
The all-cash transaction is valued at approximately $3.9 billion, including One Medical’s net debt, Amazon said in a statement Thursday.
One Medical is owned by 1Life Healthcare Inc. and operates medical offices in 182 markets across the U.S.
“We think healthcare is high on the list of experiences that need reinvention,” said Neil Lindsay, the senior vice president leading Amazon’s health care push.
Continue reading: Amazon’s New Weapon Against Fake Reviews: A Lawsuit Aimed at Thousands of Facebook Groups
In recent years, Amazon has opened an online pharmacy after it acquired PillPack Inc. mail-order pharmacy. It also started a primary care clinic for employees of other companies and other health-focused initiatives. The One Medical deal would be Amazon’s third-biggest acquisition, trailing only its purchases of organic grocer Whole Foods Market and film studio Metro-Goldwyn-Mayer.
Primary care is one of the most profitable areas in medicine. It has attracted investment from retail chains, insurers, and pharmacies. CVS Health Corp. as Walgreens Boots Alliance Inc. both announced that they are adding primary-care services into their stores. Walgreens lost 3.1% last week after agreeing to buy a controlling share in VillageMD clinic chain. CVS fell 2.7% while Teladoc Health Inc. dropped 7.9%.
Amazon shares fell less than 1% and 1Life Healthcare rose about 66%.
One Medical started as an early effort to improve primary-care services. The clinics were located in cities, and patients paid premiums to be enrolled. The company offered a lower annual fee and access to virtual consultations, as well as better customer service than traditional medical practices. The company made arrangements with New York’s Mount Sinai Health System to provide specialty care referrals.
One Medical, unlike Oak Street Health Inc. and other investors-backed clinic chains, has always focused on the fee-for-service model of medical care rather than the newer payment models much of this industry is shifting to. That changed last year with the company’s $1.4 billion acquisition of Medicare-focused chain Iora Health Inc., known for trying to reinvent senior care by improving quality while managing costs.
Continue reading: The number of drug overdose deaths rose among Indigenous Americans and Blacks during the COVID-19 Pandemic
Although billions of dollars have been invested in companies that aim to revolutionize primary care, many clinic owners have had a difficult time trading on the public market and their valuations have fallen in recent months. One Medical trades below the 2020 initial public offering price before this deal is announced.
Bloomberg published earlier in the month, that One Medical had begun to consider its options due to CVS’s takeover interest.
Completion of the transaction is subject to customary closing conditions, including approval by One Medical’s shareholders and regulatory approval. Amir Dan Rubin, One Medical’s Chief Executive Officer, will assume the helm after completion.
Read More From Time