Digital staffing company Aya Healthcare is walking away from a proposed acquisition of travel nursing company Cross Country Healthcare and has terminated the merger agreement, citing the burdens of gaining regulatory clearance for the deal.
Aya Healthcare, a healthcare talent software and staffing company, announced in early December last year that it planned to acquire Cross Country Healthcare for $18.61 per share in cash in a transaction valued at approximately $615 million.
At the time, Aya said the two companies offered complementary, tech-enabled workforce solutions across the continuum of care. The proposed combination would diversify Aya’s coverage to include Cross Country’s clinical services in nonclinical settings, including schools and homes, in addition to travel nursing and allied health, per diem, permanent staff hiring, interim leadership, locum tenens and nonclinical professionals in all 50 states, according to a press release.
“While both companies continue to believe in the merits of the transaction, shifting market conditions and the extensive time and resources already invested – and those still required – for regulatory clearance led Aya to decide not to proceed,” Aya Healthcare said in a press release issued Thursday.
“The two organizations entered into the agreement with the shared goal of expanding innovative solutions and delivery capabilities for healthcare systems and schools, as well as broadening workforce opportunities and delivering world-class experiences for healthcare professionals and educators nationwide,” Aya Healthcare executives said in a statement.
The deal faced regulatory delays and was impacted by the government shutdown.
In February, Cross Country Healthcare revealed in a filing with the Securities and Exchange Commission that it received a second request from the Federal Trade Commission regarding its planned sale to Aya Healthcare. Another regulatory filing in November indicated that the waiting period for the proposed acquisition was extended further while the government was shut down, and, ultimately, the Dec. 3 closing date could not be reached.
FTC staff “identified significant competitive concerns with Aya Healthcare’s proposed acquisition of Cross Country Healthcare,” FTC Bureau of Competition Director Daniel Guarnera said in a statement issued Friday.
The deal would have eliminated head-to-head competition between two of the largest firms providing the software and services that hospitals use to find, hire, and manage their pools of traveling nurses and other temporary healthcare workers, Guarnera said.
“Further consolidation in this important market risked reducing the options available for many thousands of healthcare workers, increasing hospitals’ expenses, and ultimately raising healthcare costs for American patients,” he said.
Aya Healthcare said both companies cooperated fully with the FTC throughout the process,
“It became evident that continuing would be excessively burdensome and create prolonged uncertainty for clients, clinicians and partners. This decision allows Aya to focus on advancing its long-term strategic priorities of accelerating innovation, strengthening its technology platform and expanding the exceptional products, services and experiences it delivers across the healthcare industry,” the company said in its statement.
“Over the past year, both teams worked tirelessly to complete the transaction as the combination would have enabled us to jointly pursue a shared vision of delivering innovative solutions that would help reduce the cost of care and deliver high clinical outcomes for patients. We are proud of the collaboration and effort that went into this process and remain confident in Aya’s ability to lead the industry forward and continue delivering exceptional experiences for our clients and clinicians,” said Emily Hazen, CEO of Aya Healthcare.
The two companies said at the time the deal was announced that clients would benefit by leveraging the full suite of technology, including a solution for vendor management, float pool technology, provider services and predictive analytics. The addition of Cross Country’s capabilities also would provide clinicians with greater flexibility and convenience by tapping into the combined pool of nationwide opportunities, the companies said.
Aya, based in San Diego, claims it is the largest healthcare talent software and staffing company in the U.S. with more than 6,000 global employees. Its
Both Aya and Cross Country have pursued M&A deals to grow their businesses as acquisitions enable staffing firms to pool resources, expand their client bases and increase their geographical footprint.
In 2023, Aya bought data-science-driven recruiting solution Winnow AI to bolster its physician recruitment capabilities. That acquisition marked Aya’s third M&A deal in five months as the company worked to build up its AI capabilities for staffing, hiring and retention.
The company also picked up Flexwise Health, a company that offers technology to forecast gaps in patient demand and staffing levels. A month later, in July, the company acquired Polaris AI, a machine learning platform that predicts future patient volume and staffing levels in clinical settings.
In 2022, Cross Country acquired Mint Medical Physician Staffing and Lotus Medical Staffing to build its locum tenens platform. Also in 2022, the company bought interim leadership firm Hireup Leadership to strengthen its position in the talent management landscape.
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