Healthcare mergers and acquisitions are in no short supply as providers, health tech companies, payers and other industry players look to expand their businesses and gain a competitive edge. Here’s a roundup of new deals that were revealed, closed, rumored or called off during the month of May.
Providers
CVS Health tied a bow on its deal to acquire Oak Street Health, picking up about 169 medical centers in 21 states for $10.6 billion. The pickup, first announced in February, will broaden CVS Health's value-based primary care platform and significantly benefit patients' long-term health by improving outcomes and reducing costs—particularly for those in underserved communities. Oak Street Health will continue to operate as a multipayer primary care provider as part of CVS Health.
BJC HealthCare of St. Louis and Saint Luke’s Health System of Kansas City signed a nonbinding letter of intent to explore a merger that would yield a 28-hospital, $10 billion, integrated, academic health system. Both health systems are based in Missouri but currently operate in distinct markets. The potential deal would aim to close before the end of the year, subject to regulatory review and other customary closing conditions.
CommonSpirit Health wrapped up its deal for five Utah hospitals and 35 medical group clinics from Steward Health Care. In previous filings, the Catholic health giant had priced the purchase at $685 million "plus certain working capital adjustments." The deal announced in February also includes imaging and urgent care centers, other outpatient ventures and a clinically integrated network of providers. Colorado-based Centura Health, part of CommonSpirit, will manage all the operations.
HCA Healthcare signed a deal to purchase 41 urgent care centers from FastMed to bolster its existing Texas markets. The facilities included in the deal are 19 and 22 locations with the FastMed and MedPost brandings, respectively, that are spread across the Dallas, Austin, San Antonio, Houston and El Paso areas. The hospital chain currently operates 92 urgent care centers in the state of Texas. Terms of the deal were not disclosed, though it is expected to close this summer.
Option Care Health, a post-acute care and infusion services provider, is dropping $3.6 billion to purchase home health and hospice company Amedisys. The deal is set to yield a massive provider of post-acute care services encompassing more than 16,500 employees and 674 care centers in 46 U.S. states, with a projected $6.2 billion in annual revenue. The transaction is expected to close in the back half of 2023.
Kaiser Permanente’s value-based care megadeal with Geisinger Health became a little less murky with the release of merger and acquisition deal terms included in the California organization’s quarterly filings. The details include upper and lower limits on planned investments by Kaiser into Geisinger as well as expectations that the merger wouldn’t close until 2024.
Pure Health, a Middle Eastern healthcare holding company, completed a previously announced minority equity investment in Ardent Health Services valued at $500 million. The stake was purchased from majority owner Equity Group Investments and other unnamed stakeholders.
Sutter Health and Sansum Clinic announced strategic partnership plans that will see the California outpatient clinic nonprofit joining Sutter. The arrangement, which is not yet formalized, would bolster Sutter’s primary care and ambulatory multispecialty care offerings.
Flagler Health+ and UF Health have reached a definitive agreement to merge. The Florida systems said they expect to close the deal this summer after announcing their initial plans back in February.
Gerald Champion Regional Medical Center has signed a nonbinding letter of intent to join international nonprofit system Christus Health. The organizations are aiming to reach a final agreement by early summer.
Premier Inc. has retained financial and legal advisers to explore a potential sale or other strategic alternatives. The healthcare group purchasing organization’s network includes more than 4,400 hospitals and health systems. A full or partial sale is on the table alongside “a broad range of potential options” including recapitalization and partnerships.
Cano Health leadership said the primary care company is on the lookout to sell off certain noncore assets as it narrows its operating focus to its Medicare Advantage provider division. The company is looking to turn around its financial performance as its losses grew to $60 million in the first quarter of the year.
Payers
Centene is selling Apixio, which provides artificial intelligence services to enable value-based care, to venture capital firm New Mountain Capital. The government insurance giant had acquired Apixio in 2020, though it has been reviewing its portfolio for strategic divestitures as part of an ongoing value creation plan. The sale is subject to regulatory approval and other closing conditions, and Centene said it expects it to be earnings-neutral in 2023.
Humana’s deal to purchase Inclusa, a Wisconsin-based managed care company, reportedly passed state regulatory reviews. Inclusa Inc. offers long-term care coverage as well as supporting 16,600 older adults and adults with disabilities in Wisconsin's Family Care program.
Tech
Florence, a patient intake and tracking technology startup, has purchased telehealth platform Zipnosis from Bright Health in an effort to expand its virtual care capabilities. Terms of the deal were not disclosed. Bright Health has been looking to shed business lines and secure hundreds of millions in new funds to stave off bankruptcy. It had purchased the 60-person Zipnosis just two years ago.
Oura, maker of a health tracking ring wearable, reportedly purchased digital identification startup Proxy in a deal valuing the company at $165 million. Proxy had been valued at $292 million in 2020.
Jackson Healthcare, a group of healthcare staffing and technology companies, signed a definitive agreement to acquire staffing platform LRS Healthcare. The deal is expected to close during the second quarter of 2023, though no other financial terms were disclosed.
Miscellaneous
Kaufman Hall entered an agreement May 1 to acquire fellow healthcare financial and strategic advisory firm Ponder & Co. Financial terms were not disclosed.