Astrana Health to acquire Prospect providers, health plan
The strategic $745M transaction opens new opportunities for Astrana in Orange County, California, where it has limited operations, says CEO.
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Technology company Astrana Health is acquiring certain assets of Prospect Health for $745 million.
Astrana is acquiring Prospect Health Plan in California, Prospect Medical Groups in California, Texas, Arizona and Rhode Island, management service organization Prospect Medical Systems, RightRx pharmacy and Alta Newport Hospital, dba Foothill Regional Medical Center, an acute care hospital with 177 licensed beds in California.
Astrana plans to fund the transaction using a combination of cash on hand and a $1.1 million 364-day senior secured bridge commitment provided by Truist Bank and J.P. Morgan.
Prospect is expected to generate approximately $1.2 billion in revenue with expected adjusted EBITDA of approximately $81 million for the 12 months ending December 31, Astrana said.
The transaction is expected to close in the middle of 2025, subject to regulatory approval and other customary closing conditions.
WHY THIS MATTERS
The purchase continues Astrana's acquisition growth.
Astrana, formerly known as Apollo Medical Holdings, said it plans to make significant investments in Prospect and its infrastructure to help ensure that healthcare remains local for patients across four states.
"This strategic transaction will significantly expand our provider network and enhance our ability to offer increased access, quality, and value for our members," said Brandon K. Sim, president and CEO of Astrana. "Prospect's established presence in key markets also opens new opportunities for Astrana, particularly in geographically adjacent Orange County, California, where we today have limited operations. We believe this acquisition continues to solidify Astrana as our nation's leading healthcare delivery platform, enabling us to deliver technology-driven, longitudinal, and patient-centered care to an estimated combined 1.7 million members across the country."
THE LARGER TREND
Prospect is an integrated care delivery system with a network of around 3,000 primary care providers and 10,000 specialists across Southern California, Texas, Arizona and Rhode Island. It has approximately 610,000 members across Medicare Advantage, Medicaid and commercial lines of business.
Headquartered in Alhambra, California, Astrana serves over 12,000 providers and over 1.1 million Americans in value-based care arrangements.
ON THE RECORD
Jim Brown, CEO of Prospect, said, "We are excited at the opportunity to partner with Astrana to build a larger, stronger, and more coordinated care delivery network which we expect will benefit our communities by increasing access, quality, value, and efficiency. We believe the strong cultural alignment, cohesive missions, and clear financial and operational synergies between our companies make Astrana the ideal partner for us. We look forward to working together to further our joint mission of delivering high-quality, affordable, and accessible care for all."
Email the writer: SMorse@himss.org
