- Amazon on Thursday said it 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 follows months of speculation about a potential acquisition, with the company reportedly drawing interest from CVS Health.
- Analysts had previously said a buyout of One Medical, which has grown rapidly since its founding in 2007, would command a significant premium. Amazon’s price of $18 a share represents a premium of 43% over One Medical’s closing price of $10.18 a share 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 and is scheduled to be offered in roughly 30 U.S. cities by the end of this year.
Acquiring 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 did not respond to a request for comment on how One Medical will be folded into its existing healthcare operations.
The Amazon deal surprised some in the healthcare sector. Despite rumors of an acquisition, Citi analysts argued earlier this month that One Medical’s cash-burning and riskier Medicare segment could be “unpalatable” for larger tech firms like Amazon.
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.
One Medical CEO Amir Dan Rubin will stay on as head of the unit following completion of the deal.