Amazon on Thursday said it is paying $18 a share in cash for San Francisco-based 1Life Healthcare. Based on a recently disclosed share count, the deal would be worth about $3.5 billion excluding debt.
One Medical is a membership-based primary-care practice with offices in 12 major U.S. markets, according to its website. It offers healthcare service in person and provides access to virtual care as well. It works with more than 8,000 companies to provide One Medical health benefits to their employees.
The deal price marks a roughly 77% premium, based on where shares of 1Life Healthcare closed on Wednesday.
Shares of 1Life Healthcare rose 68% to $17.10 on Thursday. Amazon shares fell slightly to $122.37.
Amazon has significant ambitions in healthcare, and CEO
Andy Jassy
has made expansion in the space a priority.
“We think healthcare is high on the list of experiences that need reinvention,” said
Neil Lindsay,
senior vice president of Amazon Health Services.
Once the deal closes, One Medical’s chief executive officer,
Amir Dan Rubin,
will remain as CEO of the business.
Launched in 2019, Amazon Care expanded from a service offered to employees in Washington state to a health service with telemedicine components that the company is seeking to provide throughout the U.S. Amazon has said it has signed several agreements with companies to offer the service to their employees, in addition to its own workers.
Amazon’s goal is to be capable of providing a service that can begin with a chat in an app, continue with a virtual visit with a healthcare professional and even include a home visit within an hour after a user connects with the service. It could end with the delivery of prescription medication to a patient’s home, Amazon executives have said.
Amazon has also launched its own pharmacy business after buying online pharmacy PillPack Inc. about two years ago.
The most expansive version of Amazon Care isn’t yet available over all the U.S. The company said the telehealth component would be available nationwide last summer, and in-person care would be available in cities such as Washington, D.C., and Baltimore.
One Medical, a tech-based primary-care company, has sought to position itself as a convenient and flexible option for patients and for employers who offer healthcare benefits to workers.
Its concierge-like model offers members virtual medical visits, wellness coaching apps and in-person visits. One Medical ended last year with 182 medical offices in 25 U.S. markets and plans to expand its geographic reach this year, according to its Securities and Exchange Commission filings.
The company faced a Congressional investigation last year into its handling of Covid-19 vaccine distribution. The investigation concluded the company used “its access to scarce coronavirus vaccines to promote the company’s business interests and push vaccine seekers toward paying for One Medical memberships,” and that One Medical employees prioritized immunization for relatives and friends.
As part of the deal, the private-equity firm
Carlyle Group Inc.,
which made a minority investment of up to $350 million in One Medical in 2018, would exit its position in the company, according to a person familiar with the investment. The investment was made before 1Life Healthcare’s 2020 initial public offering.
—Melanie Evans contributed to this article.
Write to Will Feuer at will.feuer@wsj.com
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