ALHAMBRA, Calif., Nov. 8, 2024
/PRNewswire/ -- Astrana Health, Inc. ("Astrana," and together
with its subsidiaries and affiliated entities, the "Company")
(NASDAQ: ASTH), a leading provider-centric, technology-powered
healthcare company enabling providers to deliver accessible,
high-quality, and high-value care to all, today announced that it
and its affiliated professional entities have entered into a
definitive agreement to acquire Prospect Health ("Prospect"), which
consists of certain businesses and assets relating to Prospect
Health System, including its California licensed health care service plan
(Prospect Health Plan), medical groups in California, Texas, Arizona and Rhode
Island (Prospect Medical Groups), management service
organization (Prospect Medical Systems), pharmacy (RightRx), and
Alta Newport Hospital dba Foothill Regional Medical Center, a fully
accredited acute care hospital with 177 licensed beds.
Prospect is an integrated care delivery system which facilitates
and coordinates the delivery of high-quality clinical care for all.
With a network of around 3,000 primary care providers and 10,000
specialists across Southern
California, Texas,
Arizona, and Rhode Island, Prospect is enabling providers
to deliver payer-agnostic, patient-centered care to approximately
610,000 members across Medicare Advantage, Medicaid, and Commercial
lines of business.
"The acquisition of Prospect would represent the combination of
two organizations with decades-long histories of enabling
independent providers and coordinating the delivery of high-quality
care for all. We believe that our organizations share a common
culture of patient centricity and a shared mission to provide
high-quality care tailored to local communities," said Brandon K. Sim, President and CEO of
Astrana.
"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 also opens new opportunities for Astrana,
particularly in geographically adjacent Orange County, California, where we today have
limited operations. We believe this acquisition continues to
solidify Astrana as our nation's leading healthcare delivery
platform, enabling us to deliver technology-driven, longitudinal,
and patient-centered care to an estimated combined 1.7 million
members across the country."
Jim Brown, CEO of Prospect, said,
"We are excited at the opportunity to partner with Astrana to build
a larger, stronger, and more coordinated care delivery network
which we expect will benefit our communities by increasing access,
quality, value, and efficiency. We believe the strong cultural
alignment, cohesive missions, and clear financial and operational
synergies between our companies make Astrana the ideal partner for
us. We look forward to working together to further our joint
mission of delivering high-quality, affordable, and accessible care
for all."
Astrana plans to make significant investments in Prospect and
its infrastructure in order to further enhance access and quality
of care for patients in local communities. The partnership between
Astrana and Prospect will help ensure that healthcare remains local
and personalized for patients across four states.
Additional details regarding Astrana's planned acquisition of
Prospect can be found on the Company's Investor Relations
website.
Transaction Details
Under the terms of the agreement, subject to satisfaction of
customary conditions, Astrana plans to acquire the Prospect
businesses and assets for a purchase price of $745 million. Astrana expects to fund the
transaction using a combination of cash on hand and a $1,095 million 364-day senior secured bridge
commitment provided by Truist Bank and J.P. Morgan.
Prospect is expected to generate approximately $1.2 billion in revenue with expected adjusted
EBITDA of approximately $81 million
for the twelve months ending December 31,
2024.
Astrana's acquisition of Prospect is expected to close in the
middle of 2025, subject to regulatory approval and other customary
closing conditions.
Advisors
J.P. Morgan Securities LLC is serving as exclusive financial
advisor to Astrana, and Russ August
& Kabat LLP is serving as legal advisor for Astrana. Morgan
Stanley & Co. LLC is serving as lead financial advisor to
Prospect, and Sheppard, Mullin,
Richter & Hampton LLP is serving as legal advisor to Prospect.
Guggenheim Partners is also serving as a financial advisor to
Prospect.
Conference Call and Webcast Information:
Astrana will host a conference call at 5:30 a.m. PT/8:30 a.m.
ET today (Friday, November 8,
2024), during which management will discuss the details of
the transaction. To participate in the conference call, please use
the following dial-in numbers about 5 minutes prior to the
scheduled conference call time:
U.S. & Canada
(Toll-Free): +1 (877)
858-9810
International
(Toll):
+1 (201) 689-8517
The conference call can also be accessed via webcast at:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=26JyTYKy.
An accompanying slide presentation will be available in PDF
format on the "IR Calendar" page of the Company's website
(https://ir.astranahealth.com/news-events/ir-calendar) after
issuance of the press release and will be furnished as an exhibit
to Astrana's current report on Form 8-K to be filed with the SEC,
accessible at www.sec.gov.
Those who are unable to attend the live conference call may
access the recording at the above webcast link, which will be made
available shortly after the conclusion of the call.
About Astrana Health, Inc.
Astrana is a leading provider-centric, technology-powered
healthcare company enabling providers to deliver accessible,
high-quality, and high-value care to all. Leveraging its
proprietary end-to-end technology solutions, Astrana operates an
integrated healthcare delivery platform that enables providers to
successfully participate in value-based care arrangements, thus
empowering them to deliver high quality care to patients in a
cost-effective manner.
Headquartered in Alhambra,
California, Astrana serves over 12,000 providers and over
1.1 million Americans in value-based care arrangements. Its
subsidiaries and affiliates include management services
organizations (MSOs), affiliated independent practice associations
(IPAs), accountable care organizations (ACOs), and care delivery
entities across primary, multi-specialty, and ancillary care. For
more information, please visit www.astranahealth.com.
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Exchange Act of 1934, as amended.
These statements include words such as "forecast," "guidance,"
"projects," "estimates," "anticipates," "believes," "expects,"
"intends," "may," "plans," "seeks," "should," or "will," or the
negative of these words or similar words. Forward-looking
statements involve certain risks and uncertainties, and actual
results may differ materially from those discussed in each such
statement. A number of important factors could cause actual results
to differ materially from those included within or contemplated by
the forward-looking statements, including, but not limited to,
risks arising from the diversion of management's attention from the
Company's ongoing business operations, an increase in the amount of
costs, fees and expenses and other charges related to the
acquisition described in this press release, outcome of any
litigation that the Company or Prospect may become subject to
relating to such acquisition, the extent of, and the time necessary
to obtain, any regulatory approvals required for completion of the
acquisition, risks of disruption to the Company's business as a
result of the public announcement of the acquisition, the
occurrence of any event, change or other circumstance that could
give rise to the termination of the agreements relating to the
acquisition, an inability to complete the acquisition in a timely
manner or at all, including due to a failure of any condition to
the closing of the acquisition to be satisfied or waived by the
applicable party, the occurrence of any event, change or other
circumstance that could give rise to the termination of any of the
agreements to the acquisition, a decline in the market price for
the Company's common stock if the acquisition is not completed,
risks that the acquisition disrupts current plans and operations of
the Company or Prospect and potential difficulties in Prospect's
employee retention as a result of the acquisition, the Company's
ability to successfully obtain funding of, and pay the interest and
principal on, the Bridge Facility provided for in the Commitment
Letter, and the ability to implement business plans, forecasts and
other expectations after the completion of the acquisition, realize
the intended benefits of the acquisition, and identify and realize
additional opportunities following the acquisition, as well as the
other risks and uncertainties identified in filings by the Company
with the Securities and Exchange Commission, including the
Company's Annual Report on Form 10-K for the year ended
December 31, 2023, as may be amended
or supplemented by additional risk factors set forth in subsequent
quarterly reports on Form 10-Q and other reports filed with the
Securities and Exchange Commission. The Company does not undertake
any responsibility to update any of these factors or to announce
publicly any revisions to any of the forward-looking statements
contained in this or any other document, whether as a result of new
information, future events, or otherwise, except as may be required
by any applicable securities laws.
Pro Forma Measures
This press release includes pro forma information that gives
effect to the consummation of the acquisition. The combined company
forward-looking financial data are for illustrative purposes only
and should not be relied on as necessarily being indicative of
future results. The assumptions and estimates underlying the
combined company forward-looking financial data are inherently
uncertain and are subject to a wide variety of significant
business, economic and competitive risks and uncertainties that
could cause actual results to differ materially from those
contained in the prospective financial information, including those
under "Forward Looking Statements" above. Combined company
forward-looking financial data is inherently uncertain due to a
number of factors outside of the Company's or Prospect's control.
Accordingly, there can be no assurance that the prospective results
are indicative of future performance of the combined company after
completing the proposed acquisition or that actual results will not
differ materially from those presented in the combined company
forward-looking financial data. Inclusion of combined company
forward-looking financial data in this press release should not be
regarded as a representation by any person that the results
contained in the prospective financial information will be
achieved. Readers are cautioned not to place undue reliance on the
pro forma combined company financial information.
Use of Non-GAAP Financial Measures
This press release contains the non-GAAP financial measure
Adjusted EBITDA, of which the most directly comparable financial
measure presented in accordance with U.S. generally accepted
accounting principles ("GAAP") is net income. This measure is not
in accordance with, or an alternative to, GAAP, and may be
calculated differently from similar non-GAAP financial measures
used by other companies. The Company uses Adjusted EBITDA as a
supplemental performance measure of its operations, for financial
and operational decision-making, and as a supplemental means of
evaluating period-to-period comparisons on a consistent basis.
Adjusted EBITDA is calculated as earnings before interest, taxes,
depreciation, and amortization, excluding income or loss from
equity method investments, non-recurring and non-cash transactions,
and stock-based compensation.
The Company believes the presentation of this non-GAAP financial
measure provides investors with relevant and useful information, as
it allows investors to evaluate the operating performance of the
business activities without having to account for differences
recognized because of non-core or non-recurring financial
information. When GAAP financial measures are viewed in conjunction
with non-GAAP financial measures, investors are provided with a
more meaningful understanding of the Company's ongoing operating
performance. In addition, this non-GAAP financial measure is among
those indicators the Company uses as a basis for evaluating
operational performance, allocating resources, and planning and
forecasting future periods. Non-GAAP financial measures are not
intended to be considered in isolation, or as a substitute for,
GAAP financial measures. Other companies may calculate Adjusted
EBITDA differently, limiting the usefulness of this measure for
comparative purposes. The Company has not provided a quantitative
reconciliation of the projected adjusted EBITDA in 2024 for
Prospect to the most comparable GAAP measure, net income, on a
forward-looking basis within this press release because the Company
is unable, without unreasonable efforts, to provide reconciling
information with respect to certain line items that cannot be
calculated. These items, which could materially affect the
computation of forward-looking GAAP net income, are inherently
uncertain and depend on various factors, some of which are outside
of the Company's control.
FOR MORE INFORMATION, PLEASE CONTACT:
Investor Relations
(626) 943-6491
Asher Dewhurst, ICR Westwicke
investors@astranahealth.com
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SOURCE Astrana Health, Inc.