Astrana Health (formerly Apollo Medical Holdings) has closed its deal to acquire the assets of Prospect Health, which include a health plan, multiple medical groups and an acute care hospital.
The purchase was announced in November ahead of Prospect Health parent company Prospect Medical Holdings’ bankruptcy declaration, but, according to court filings at the time, was not affected by those proceedings.
Still, Astrana shared news Wednesday that it paid just $708 million for the assets as opposed to the $745 million of the original announcement. Astrana said the price cut was in line with the purchase agreement’s terms and “underscores the company’s commitment to disciplined capital deployment, while maintaining full conviction in the value creation potential of the asset.”
Deal closed, Astrana controls Prospect Health Plan, a California licensed healthcare service plan; Prospect Medical Groups in California, Texas, Arizona and Rhode Island; Prospect Medical Systems, a management service organization that laid off 125 workers this past month; a pharmacy asset called RightRX; and the 177-bed Alta Newport Hospital, which does business as Foothill Regional Medical Center.
Astrana has said it plans to make significant investments in Prospect Health and its infrastructure, and, Wednesday, reaffirmed its belief that the assets would deepen its high-quality, high-value care delivery capabilities.
“We are excited to welcome Prospect Health’s physicians, providers and team members to Astrana Health,” Brandon Sim, president and CEO of Astrana, said in a release. “Together, we will further accelerate our mission to drive consistent, coordinated, high-quality patient outcomes at scale, ultimately driving greater value across the healthcare ecosystem.”
Alhambra, California-based Astrana describes itself as a tech-enabled integrated care delivery platform helping providers participate in value-based care arrangements. It works with more than providers (12,000 prior to the deal) and 1.6 million patients (1.1 million prior), and counts management services organizations, affiliated independent practice associations, accountable care organizations and care delivery among its subsidiaries.
As disclosed ahead of the deal, Prospect Health is expected to contribute approximately $1.2 billion in revenue with expected adjusted EBITDA of approximately $81 million on a full-year basis. Additionally, Astrana is anticipating between $12 million and $15 million in 12- to 18-month synergies from bringing the assets in house.
Astrana also said it will be updating its full-year 2025 guidance to reflect Prospect Health’s contribution during the back half of the year. Total revenue for the year is expected to land between $3.1 billion and $3.3 billion and adjusted EBITDA between $215 million and $225 million, it said.
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