On Thursday, Amazon said it had closed a deal to acquire One Medical, a chain of primary care clinics, for $3.9 billion, a big step in the e-commerce giant’s plans to become a player in the healthcare industry.
One Medical, based in San Francisco, operates a network of primary care providers that offer in-office and virtual medical services and is one of the leading competitors to a similar but smaller service that Amazon has begun offering.
Amazon will acquire One Medical at $18 per share for cash. said in a statement. The deal will require the approval of One Medical’s shareholders and regulators.
“We think healthcare is high on the list of services to rethink,” Neil Lindsay, senior vice president of Amazon Health Services, said in a statement.
The deal is the first major acquisition by Andy Jassi, who took over as Amazon chief executive last year when founder Jeff Bezos stepped down. mr. Yassy has told investors he will cut costs, although the acquisition shows he will not shy away from strategic investments at a reasonable price.
One Medical, former Silicon Valley “unicorn” the term for the startup, valued by investors at $1 billion or more, went public in 2020 at $22.07 per share. After peaking at $58.70 last year, the share price closed on Wednesday at $10.18.
“We look forward to being able to innovate together and expand access to quality medical services,” said One Medical chief executive Amir Dan Rubin, who will remain in his post after the closing of the deal.
In 2019, Amazon launched its own primary and emergency care service called Amazon Care to treat its employees first in Washington state and then nationally. It is based on virtual sessions with providers and home visits, although it is expanding its physical clinics.
Amazon Care has tried to convince other employers to offer the service, but without much success. In announcing its national expansion this year, the company promoted Amazon-owned Silicon Labs, TrueBlue and Whole Foods Market as customers.
One Medical is much bigger, with over 8,500 employers signed up as clients. One Medical also offers memberships directly to consumers.
Amazon’s ambitions to become a healthcare player accelerated in 2018 when the company spent $753 million buy a startup Tabletsonline pharmacy, in an attempt to capture a piece of the $560 billion prescription drug industry.