Health

Amazon buys primary care company One Medical for $3.9 billion


Onemazon.com Inc. announced it will acquire the primary care company A medical at $18 a share, the e-commerce giant’s latest move to enter the healthcare market.

Amazon said the all-cash transaction was worth about $3.9 billion, including One Medical’s net debt.

One Medical, whose parent company is called 1Life Healthcare Inc., operates 182 medical offices in 25 markets in the United States.

“We think healthcare is on the list of experiences that need to be reinvented,” said Neil Lindsay, Amazon’s senior vice president of healthcare promotion.

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Amazon in recent years has launched an online drug store, after acquiring the mail-order pharmacy PillPack Inc., and started a primary health clinic for its employees and several other companies, among other health-focused initiatives. The One Medical deal will be Amazon’s third-biggest acquisition, behind only the organic grocery store Whole Foods Market and the movie studio. Metro-Goldwyn-Mayer.

One of the least profitable sectors in medicine, primary care has been attracting investment from retailers, health insurers and drugstore chains. CVS Health Corp. and Walgreens Boots Alliance Inc., both of which are adding primary care services to their stores, made the news. Walgreens, which last year agreed to pay $5.2 billion for a controlling stake in clinic chain VillageMD, fell 3.1% when the market opened in New York, CVS lost about 2.7% and Teladoc Health Inc. . down 7.9%.

Amazon shares are up less than 1%, and 1Life Healthcare is up about 66%.

One Medical started as an early effort to improve primary care services with sleek clinics in urban centers that patients or their employers paid to join. For an annual fee, the company promises easier access to virtual appointments and consultations as well as a higher level of customer service than conventional medical approaches. It has reached agreements with major health networks such as the Mount Sinai Health System in New York to refer patients to intensive care services.

But unlike other investor-backed clinic chains like Oak Street Health Inc., One Medical has previously focused on fee-for-service medical care, rather than the new payment models that have largely influenced the industry. is switching. That changed last year with the company’s $1.4 billion acquisition of chain-focused company Iora Health Inc.

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Despite billions of dollars invested in companies trying to reinvent primary care, clinic operators have struggled in the public market and valuations have fallen in recent months. Before the deal was announced, One Medical was trading below the price of its IPO in 2020.

Bloomberg report Earlier this month, One Medical weighed its options after attracting takeover interest, including from CVS.

Transaction completion is subject to customary closing conditions, including One Medical shareholder approval and regulatory approval. Upon completion, Amir CEO Dan Rubin will continue to run One Medical.

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