One Medical will be acquired by e-commerce behemoth Amazon in a deal valued at around $3,9 billion.
Η The Amazon intends to acquire the primary care organization One Medical in a deal worth approx 3,9 billion dollars, marking another expansion for the retailer into healthcare services.
The Seattle-based e-commerce giant said in a statement Thursday that it is buying One Medical for 18 dollars per share in a cash only transaction. It is one of Amazon's biggest acquisitions, after the $13,7 billion deal for its purchase Whole Foods in 2017 and the market 8,5 billion dollars of the studio MGM of Hollywood, which closed earlier this year.
One Medical, whose parent company is 1Life Healthcare, Inc based in San Francisco, is a membership-based service that offers virtual care as well as in-person visits. It also partners with more than 8.000 companies to provide its health benefits to employees.
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As of March, One Medical had approx 767.000 members and 188 clinics into a 25 purchases, according to its first-quarter earnings report, which also showed the company had suffered a net loss of $90,9 million after revenue of $254,1 million. The total value of the deal announced Thursday includes One Medical's debt.
Ο Neil Lindsay, its senior vice president Amazon Health Services, said in a statement that the redemption aims to reinvent the healthcare "experience" for things like booking appointments and walking into the pharmacy.
"We love to invent to make what should be easy even easier, and we want to be one of the companies that will help dramatically improving the healthcare experience the next few years,” Lindsay said.
Overall, consumer demand for telemedicine and virtual healthcare visits soared during the pandemic Covid-19. Those who pay health care bills, such as employers and insurers, they also focus more on improving access to patient care and making sure their patients stay on top of their health, see their doctors regularly and get their prescriptions.
The health care costs have increased faster than wages and inflation for years and represents a huge cost for employers who offer coverage. Employers and insurers believe that by connecting people with regular care, they can prevent costly hospital stays or prevent chronic conditions such as diabetes from leading to bigger problems.
For the The Amazon, the acquisition deepens its foray into healthcare services, the latest industry the company has tried to disrupt. In 2018, he bought it online pharmacy PillPack for 750 million before opening her own online pharmacy that allows customers to order drugs or prescription drugs and have them delivered to their front door in a matter of days. And last year, it started offering the program telemedicine Amazon Care to employers nationwide.
Ο Neil Saunders, its managing director GlobalData Retail, said it's no surprise that Amazon is expanding its footprint in healthcare. The company's retail and cloud computing businesses are becoming more mature and it is looking to find new opportunities for growth, Saunders said. Healthcare, which is complex but extremely lucrative, is an attractive option. But such an undertaking is not always easy.
"Amazon will need to work extremely hard and be extremely innovative if it wants to do more than just shake things up at the margins," Saunders said. “Based on past events, the jury is out on whether Amazon can actually pull this off. Although it has invaded the online pharmacy space, it has not revolutionized the market. Neither is its acquisition Whole Foods – the largest deal in its history – has led to major disruption.”
The agreement comes as the The Amazon and other big tech companies face scrutiny from lawmakers over their market power. Shortly after the company's announcement on Thursday, critics asked regulators to USA to block the market on the grounds that it compromises privacy.
"Amazon's acquisition of One Medical is the latest take on a terrifying new stage in the business model of the world's largest companies," said Barry Lynn, its executive director Open Markets Institute, an organization that advocates for stricter antitrust regulations. “The deal will expand Amazon's capacity to collect the most domestic and personal information about individuals, in order to track, target, to manipulate and exploit people in increasingly intrusive ways."
During the pandemic, the One Medical faced a congressional investigation after reports that the company was violating guidelines for Covid-19 vaccines. The investigation concluded that the company had exploited "its access to rare coronavirus vaccines to advance the company's business interests" and push vaccine applicants to pay for its subscriptions. He also said the company and its employees prioritized vaccinations for family and friends.
In afternoon trading, its shares 1Life Healthcare rose 69% to $17,17. THE The Amazon added less than 1% to $123,75.
The deal is subject to regulatory approval. Upon completion, Amazon said that the CEO of One Medical Amir Dan Rubin will remain in place.