Amazon is taking over everything. Its latest move: spending $3.9 billion to acquire One Medical.
The Seattle-based retail giant will acquire the San Francisco-based subscription health care provider for $18 per share, the company announced Thursday. The deal covers the health care company’s net debt, and will be complete once it receives regulatory approval and is approved by One Medical's shareholders.
One Medical has 10 clinics across Los Angeles and five in Orange County and has made a name for itself by offering 24/7 telehealth access and guaranteed same or next-day appointments. The company went public in 2020 and has since acquired primary care company Iora Health in a $2.1 billion deal. Expanding throughout Southern California in the past few years, One Medical grew its membership by 34% in 2021.
Telehealth companies saw a boom during the pandemic, and some are pushing to continue coverage for virtual treatments. One Medical, however, faced criticism for letting ineligible people skip the line for vaccines and accidentally charging people for the shot.
Amazon has been eyeing the health care industry for the past few years. The company launched telehealth Amazon Care for its employees in 2019 and earlier this year expanded the program nationally. In 2018, Amazon bought prescription-by-mail company PillPack for $1 billion—a move that caused traditional pharmacies to lose billions in market value.
“We think health care is high on the list of experiences that need reinvention,” said SVP of Amazon Health Services Neil Lindsay in a statement.
This acquisition is Amazon’s third most expensive, behind the $13.7 billion Whole Foods purchase and the $8.5 billion MGM deal. Amir Dan Rubin will stay on as One Medical’s CEO. Since the deal announcement, One Medical shares have surged 68%.
A number of Los Angeles-based startups are working to disrupt the health care industry, with multiple prescription delivery and telehealth companies making a name for themselves. Since telehealth is apparently here to stay, making the programs accessible remains a concern.
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