Amazon plans to buy One Medical parent company 1Life Healthcare—a membership-based healthcare company that offers primary care services—in a deal valued at $3.9 billion, after shares of the health firm plunged more than 70% over the past year, and as Amazon takes another step into the healthcare space more than two years after the Covid-19 pandemic began.
Amazon will buy One Medical—which offers virtual health care through an application as well as in-person offices in more than a dozen U.S. cities, according to the company’s website—including all of One Medical’s net debt, for $18 a share in cash, the e-commerce giant said.
Shares of 1Life surged 68% Thursday morning following the news, after closing at $10.18 a share Wednesday, giving the company a value of nearly $2 billion.
Amazon said it saw “lots of opportunity” to “improve the quality” of the health care experience and “give people back valuable time in their days,” while One Medical said it saw “immense” opportunities to “make the health care experience more accessible, affordable, and even enjoyable.”
One Medical will keep its CEO, Amir Dan Rubin, once the deal is complete, Amazon said.
One Medical went public in 2020 at $14 a share. Shares of the company—whose members pay a $199 annual fee—rose to $54 in early 2021, giving the company a market cap of over $6 billion at the time. The stock has plummeted since. Reports emerged two weeks ago that the health care company was considering a takeover, after several companies, including CVS, expressed interest. The acquisition marks the latest move from Amazon into the healthcare industry, after launching its first telemedicine program a year into the pandemic with its app Amazon Care. Amazon is one of several companies that have forayed into the healthcare space in recent years, as well as Apple, Google and Microsoft.
Congress launched an investigation into One Medical’s Covid-19 vaccination practices in March 2021 after several outlets, including Forbes, reported the company did not enforce state vaccination guidelines by allowing healthcare workers to get vaccinated without proof of identification, effectively allowing people to jump the line during a time when vaccines were scarce.
One Medical Let People Jump The Line For Covid-19 Vaccines (Forbes)
Amazon to Buy One Medical for $3.9 Billion in Healthcare Deal (Wall Street Journal)