Astrana Health, a provider-centric healthcare company, and its affiliated professional entities, have entered a definitive agreement to acquire Prospect Health.
This acquisition includes Prospect Health System’s businesses and assets, such as its California licensed health care service plan; medical groups in California, Texas, Arizona, and Rhode Island; a management service organisation; a pharmacy, and a fully accredited acute care hospital with 177 licensed beds.
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The acquisition is valued at $745m, with Astrana funding the transaction through cash on hand and a $1.09bn senior secured bridge commitment from Truist Bank and JP Morgan.
The deal is anticipated to close in mid-2025, pending regulatory approval and customary closing conditions.
Astrana president and CEO Brandon K Sim said: “The acquisition of Prospect would represent the combination of two organisations with decades-long histories of enabling independent providers and coordinating the delivery of high-quality care for all.
“This strategic transaction will significantly expand our provider network and enhance our ability to offer increased access, quality, and value for our members. 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.”
Prospect Health is an integrated care delivery system facilitating and coordinating clinical care.
Prospect has a network of around 3,000 primary care providers and 10,000 specialists across Southern California, Texas, Arizona, and Rhode Island.
It delivers healthcare to approximately 610,000 members across Medicare Advantage, Medicaid, and Commercial lines of business.
Prospect CEO Jim Brown 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.”
Astrana plans to make significant investments in Prospect and its infrastructure, ensuring healthcare remains local and personalised across the four US states.
For the twelve months ending 31 December 2024, Prospect is expected to generate about $1.2bn in revenue with an adjusted EBITDA of approximately $81m.
