One Medical (ONEM) Announces Deal To Buy Iora Health In $2.1 Billion Deal: Details

By Amit Chowdhry ● June 7, 2021
  • 1Life Healthcare announced it has entered into a definitive agreement to buy Iora Health in a $2.1 billion deal. These are the details.

1Life Healthcare, Inc. (known as One Medical) (Nasdaq: ONEM) — a leading human-centered and technology-powered primary care organization — announced today it has entered into a definitive agreement to buy Iora Health, which is a human-centric value-based primary care group with built-for-purpose technology focused on serving Medicare populations in an all-stock transaction valued at approximately $2.1 billion.

One Medical (DOC-OLD) and Iora Health are known for being aligned in their missions, models, and cultures to transform healthcare for key stakeholders: Consumers, Employers and Payers, Providers, and Health Networks. And together, the two companies can further accelerate and build upon their impacts for these stakeholders while simultaneously expanding their models in existing markets, entering new markets, serving new populations, expanding full-risk models, and utilizing their purpose-built technologies for increased growth and scale.

These are the strategic benefits of the transaction according to the companies: 

— Creates a premier national member-based and technology-powered primary care platform to deliver better health, better care, and lower costs across Commercial and Medicare populations

— Positions One Medical with Iora Health to advance the health of members across every stage of life

— Extends One Medical’s platform to deliver multi-modal care with 24/7 national digital health and in-person care across a combined 28 markets and beyond

— Expands potential market opportunity to $870 billion across Commercial and Medicare segments, including the new Medicare Direct Contracting program

— Enhances One Medical’s risk-taking capabilities and extends One Medical into full-risk Medicare reimbursement models

— Accelerates the expansion of two high-growth organizations with complementary cultures and models serving as a premier place to practice modernized healthcare

— Offers an opportunity to create significant value with an expected $350+ million in annual revenue synergies by 2025 and about $30 million in annual net cost synergies by 2025, and with about $30 million in cumulative capex savings through 2025.

An Iora Health designee will join the One Medical Board and Rushika Fernandopulle will become One Medical’s Chief Innovation Officer.

Under the terms of the deal, Iora Health shareholders will receive 56.1 million shares of One Medical common stock. And based on the closing share price of One Medical’s common stock of $35.59 on June 4th, 2021, the total transaction is valued at approximately $2.1 billion. Upon completion of the deal, Iora Health shareholders are expected to own approximately 26.75% of the combined company.

The deal is expected to close in late Q3 or Q4 of 2021 and is subject to customary closing conditions, including approval by One Medical and Iora Health stockholders and receipt of regulatory approval.

KEY QUOTES:

“We are delighted to announce plans to combine with Iora Health, a technology-powered primary care leader delivering outstanding member-based, value-based care for adults 65+ enrolled in Medicare Advantage and other at-risk reimbursement models. Together we will expand our addressable market to serve more members in more geographies with digital and in-person care across every stage of life, with further capabilities to deliver care within full-risk models. Together with Iora Health, we can deliver better health, better care, and lower costs for children, adults, and seniors.” 

— Amir Dan Rubin, Chair & CEO of One Medical

“Chris McKown and I founded Iora Health over 10 years ago to build an innovative primary care model that transforms lives and improves outcomes through relationship-based care, and we are excited to take this next exciting step with One Medical. Together, with our aligned cultures, shared mission, and complementary models, we can drive even greater impact for our patients, our teams, and our investors, and most importantly, our shared vision of transforming healthcare.”

— Rushika Fernandopulle, M.D., MPP, Co-Founder and Chief Executive Officer of Iora Health

“One Medical has proven its ability to drive profitable membership growth, engage with members, improve health outcomes and lower costs. I am excited at the prospect of creating even more differentiation by adding Iora Health’s Medicare-focused capabilities, expanding our reach to 28 markets, and offering our service experience to the parents and grandparents of our 598 thousand members.” 

— Bjorn Thaler, Chief Financial Officer, One Medical

Note: Based in San Francisco, 1Life Healthcare is the administrative and managerial services company for the affiliated One Medical physician-owned professional corporations that deliver medical services in-office and virtually. The 1Life and the One Medical entities do business under the “One Medical” brand.

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.