Health

Healthcare Dealmakers—Intermountain, SCL Health’s 33-hospital merger; Invitae’s $325M Ciitizen acquisition

Healthcare mergers and acquisitions are in no short supply as providers, health tech companies, payers and other industry players look to expand their businesses and gain a competitive edge. Here’s a roundup of new deals that were revealed, closed or called off during the month of September.


Providers

Intermountain Healthcare and SCL Health unveiled plans to merge and form a 33-hospital system and health insurer. Pending approvals, the nonprofit systems said they are aiming to finalize the agreement before the end of 2021 and combine in the early part of 2022. The combined entity would employ more than 58,000 people and run 385 clinics across Utah, Idaho, Nevada, Colorado, Montana and Kansas.

One Medical wrapped up its $2.1 billion acquisition of Iora Health Sept. 1. The deal is said to expand the primary care provider’s potential market opportunity to $870 billion.

NorthShore University HealthSystem and Edward-Elmhurst Health announced plans to merge under a new nine-hospital parent entity. The pending deal is targeting a 2021 close. It would form a system employing roughly 25,000 people and more than 6,000 physicians.

HCA Healthcare entered a preliminary agreement to sell off nearly 50 of its recently acquired home health locations, hospices and therapy agencies to LHC Group. The deal is set to close in the fourth quarter of 2021.

HCA Healthcare also signed a deal to acquire the operations of five Utah hospitals from Steward Health Care. Terms of the acquisition were not disclosed. The move brings HCA Healthcare’s total number of Utah hospitals up to seven and bolsters its Mountain Division, which spans Utah, Idaho and Alaska.

Spectrum Health and Beaumont Health’s announced merger is being delayed beyond its fall 2021 target by a “tidal wave” of merger and acquisition filings at the Federal Trade Commission. The Michigan providers also noted that they are responding to the agency’s request for additional information on the merger, “which the organizations understand has become increasingly common,” they wrote. If approved, the merger would yield a 22-hospital system.

Tower Health has signed off on the sale and closure of two hospitals in an effort fortify its finances. The former arrangement will transfer Chestnut Hill Hospital and more than a dozen urgent care centers to Trinity Health Mid-Atlantic. Its Jennersville Hospital, meanwhile, will be closed by Jan. 1.

Appalachian Regional Healthcare has signed an agreement to acquire Paul B. Hall Regional Medical Center, a 72-bed acute care hospital in Kentucky, for an undisclosed sum. The providers expect Appalachian to assume day-to-day operations Dec. 1.

Affinity Health Partners has agreed to purchase Martin General Hospital from Quorum Health. Terms were not disclosed. The 49-bed facility is located in Williamston, North Carolina. The companies expect their deal to close Dec. 1.

Payers

Humana is once again rumored to be eyeing a takeover of Medicaid managed care company Centene. The speculation is based on chatter that a Humana private jet was spotted near Centene’s St. Louis headquarters and follows a similar rumor from 2019 that was directly debunked by the payer.

The Walgreens Boots Alliance announced a $970 million investment in specialty pharmacy Shields Health Solutions. This will give Walgreens a majority 71% stake in the company, as well as an option to fully acquire in the future. Walgreens said the move solidifies its focus on accelerating innovative healthcare models.

Tech

Invitae, a medical genetic data company, is set to acquire consumer medical record technology company Ciitizen for $325 million. The deal breaks down to $125 million in cash and 7 million shares of stock, as well as $225 million in restricted stock units issued to Ciitizen employees who stick around after the acquisition. The companies’ executives said they hope to develop a centralized hub for medical data—including consumers’ genomic and clinical information—that can support research and decision-making.

Unite Us has scooped up fellow social determinants of health software platform NowPow for an undisclosed sum. The combined companies will hold a diverse customer and partner base of payers, providers and governments as well as educational services, child welfare and community-based organizations.

Athenahealth owners Veritas Capital and Elliott Investment Management are reportedly exploring a potential sale or initial public offering of the tech company. They are said to be aiming for a $20 billion valuation and are targeting a deal by the end of the first quarter of 2022. The private equity firms had purchased the electronic health record and practice management company for $5.7 billion in 2018.

Azalea Health, an electronic health record vendor, acquired healthcare analytics software maker dashboardMD for an undisclosed sum. Azalea said it will be merging dashboardMD’s team with its own and hopes to add their analytics capabilities and expertise to its existing platform.

Zelis, a healthcare payments company, is acquiring price transparency and provider selection company Sapphire Digital for an undisclosed sum. The deal is expected to close in the fourth quarter and provides Zelis with Sapphires’ 100 million-plus members from more than 50 health plan, third-party administrator and self-funded employer organizations.

Symplr, a maker of healthcare operations tools, announced it will be acquiring clinical communication and collaboration software maker Halo Health for an undisclosed sum.

Edifecs, a health IT solutions vendor, has acquired Talix, which provides risk adjustment and quality analytics software for providers and payers. Edifecs plans to integrate its Encounter Management product with Talix’s offerings.

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