Astrana Health to Grow Provider Network Through Prospect Health System Acquisitions

The deal is expected to generate around $1.2 billion in revenue for Prospect, which adds a partner willing to invest in delivering care.

Astrana Health has had made its latest bid to add to its expanding portfolio.

The technology-driven company has entered into a definitive agreement to buy certain assets and businesses from Prospect Health System for $745 million to continue building out its integrated healthcare delivery platform.

Astrana will acquire Prospect Health Plan in California, Prospect Medical Groups in California, Texas, Arizona, and Rhode Island, management service organization Prospect Medical Systems, pharmacy asset RightRx, and Tustin, California-based Alta Newport Hospital, doing business as Foothill Regional Medical Center.

To fund the transaction, which is expected to close in the middle of 2025 if it passes regulatory approval, Astrana stated it will use cash on hand as well as a $1.1 million senior secured bridge commitment.

Astrana, which rebranded from Apollo Medical Holdings earlier this year, has been active in acquiring companies that fit its value-based care arrangements.

In October, the company close its deal for Collaborative Health Systems, a management services subsidiary of Centene.

The pieces of Prospect that Astrana is obtaining allow it to round out its care delivery and management service organization offerings, while bringing in Prospect’s approximately 610,000 members across Medicare Advantage, Medicaid, and commercial lines of business onto its platform.

“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,” Brandon Sim, president and CEO of Astrana, said in a statement. “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."

In its third quarter earnings, Astrana reported total revenue of $478.7 million, which was up 37% from the $348.2 million reported in Q3 2023. Net income, meanwhile, was $16.1 million, down 27% from $22.1 million over the same period last year.

For Prospect, the transaction is expected to generate around $1.2 billion in revenue with expected adjusted EBITDA of $81 million for the 12 months ending December 31, according to the announcement.

Astrana said it will significantly invest in Prospect and its infrastructure to improve access and quality of care for local communities.

"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,” Jim Brown, CEO of Prospect, said in a statement.