One Medical closes acquisition of senior-focused Iora Health

Looking at the senior care space, One Medical, a hybrid primary care provider, has finally completed its purchase of tech-backed Medicare provider Iora Health for approximately $1.4 billion. This comes roughly three months after the companies made the deal public. 

As part of the terms, Iora Health shareholders will get roughly 56 million shares of One Medical common stock. This shakes out to One Medical shareholders owning roughly 73% of the company and Iora Health shareholders having 27% of the joint company. 

One Medical specified that after the acquisition the company doesn’t anticipate any near-term changes to Iora Health and plans to let it operate as its own practice. 

Iora caters to the 65-and-older population, and assigns each member a provider, nurse and health coach. Both patients and their families can be connected to caregivers through the company’s platform.

WHY IT MATTERS 

One Medical positions this as a way to combine two hybrid primary care providers with different focuses. By purchasing Iora Health, One Medical will be tapping into already established relationships with Medicare Advantage Plans, original Medicare and Medicare Direct Contracting programs, according to its investor presentation. The deal will also let One Medical tap into the $900 billion Medicare spend. 

In terms of scope, Boston-based Iora currently has over 600 employees and serves 39,000 patients. The expected 2021 revenue for Iora Health is $318 million. Meanwhile, One Medical’s is $480 million. The deal will also combine One Medical’s 621,000 members and Iora’s 39,000 patients. 

“One Medical is now even better positioned to deliver better health, better care and lower costs across every stage of life,” said Amir Dan Rubin, chair & CEO of One Medical. “One Medical will extend its reach from children and adults to even more seniors across 28 existing and announced combined geographies encompassing approximately 40% of the U.S. population, with a national potential addressable market of approximately $870 billion.

“One Medical’s demonstrated ability to delight and attract members, enable improved health outcomes, reduce the cost of care and simultaneously deliver results for multiple key stakeholders will now be extended further in pursuit of our mission to transform healthcare.”

THE LARGER TREND 

One Medical filed for an IPO at the beginning of 2020 for $14 per share. Currently the stock is trading for approximately $24.67 per share. 

One Medical was in hot water last winter when a report from NPR broke stating that the company had allowed ineligible patients, including young, healthy people, as well as friends and family of company leadership, to skip the line to get a COVID-19 vaccine. After this report, several Bay Area counties cut off their vaccine supply to One Medical, and Congress launched an investigation. One Medical called this a gross “mischaracterization” during an earnings call. 

Iora has caught venture capital’s attention in recent years. In 2020, the startup landed $126 million Series F funding bringing the company’s total funding to at least $349.5 million. 

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