Technology company Astrana Health has announced the acquisition of certain assets of Prospect Health for a whopping $745 million. This strategic move by Astrana includes 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, also known as Foothill Regional Medical Center, an acute care hospital with 177 licensed beds in California.
To finance this significant transaction, Astrana plans to utilize a combination of cash reserves and a $1.1 million 364-day senior secured bridge commitment from Truist Bank and J.P. Morgan. Prospect Health is projected to generate around $1.2 billion in revenue with an expected adjusted EBITDA of approximately $81 million for the 12 months ending December 31, according to Astrana.
The transaction is slated to close in the middle of 2025, pending regulatory approval and other customary closing conditions. This acquisition marks another milestone in Astrana’s growth strategy, formerly known as Apollo Medical Holdings, as it continues to expand its provider network and enhance healthcare delivery across multiple states.
Brandon K. Sim, President, and CEO of Astrana, expressed excitement about the acquisition, emphasizing the company’s commitment to investing in Prospect Health’s infrastructure to ensure local healthcare access for patients. Sim stated, “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 opens new opportunities for Astrana, solidifying our position as the nation’s leading healthcare delivery platform.”
Prospect Health, an integrated care delivery system, boasts a network of approximately 3,000 primary care providers and 10,000 specialists across Southern California, Texas, Arizona, and Rhode Island, serving around 610,000 members across Medicare Advantage, Medicaid, and commercial lines of business. Astrana, headquartered in Alhambra, California, currently serves over 12,000 providers and more than 1.1 million Americans in value-based care arrangements.
Jim Brown, CEO of Prospect Health, expressed enthusiasm about the partnership with Astrana, highlighting the shared mission of delivering high-quality, affordable, and accessible care to communities. Brown stated, “We are excited at the opportunity to partner with Astrana to build a larger, stronger, and more coordinated care delivery network. We believe the strong cultural alignment, cohesive missions, and clear financial and operational synergies between our companies make Astrana the ideal partner for us.”
This acquisition signifies a significant step in Astrana’s mission to provide technology-driven, patient-centered care to an estimated combined 1.7 million members nationwide. The collaboration between Astrana and Prospect Health aims to enhance access, quality, and efficiency in healthcare delivery, ultimately benefiting patients and communities alike.
