Struggling Rhode Island hospitals’ physician group in acquisition by Astrana Health

From Astrana’s announcement:

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.

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.  

UPDATE: Charter Care in RI requested a clarification that “the CharterCARE hospitals are NOT part of the sale, the IPA is”. The IPA is the Independent Physicians Association. No further information was provided.

This is a developing story