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One Medical announced on Monday that it entered into a definitive agreement to acquire Iora Health, a primary care group providing technology to serve Medicare populations, in an all-stock transaction valued at around $2.1 billion. The deal, which is subject to approval by both companies' stockholders, is expected to close late in the third quarter or in the fourth quarter.
Amir Dan Rubin, CEO of One Medical, remarked that Iora Health delivers "outstanding member-based, value-based care for adults 65 plus enrolled in Medicare Advantage and other at-risk reimbursement models." Rubin added that the purchase "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."
According to One Medical, the deal also extends its platform to deliver multi-modal care with 24/7 digital health and in-person care in the US across a combined 28 markets. Meanwhile, the purchase is expected to create more than $350 million in annual revenue synergies by 2025.
Under the agreed terms, Iora Health shareholders will receive 56.1 million shares of One Medical common stock, which had a closing price of $35.59 on June 4. Upon completion of the transaction, Iora Health shareholders will own around 26.75% of the combined company. An Iora Health designee will join the One Medical's board and CEO Rushika Fernandopulle will become One Medical's chief innovation officer.
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