Alhambra, Calif.-based Astrana Health acquired Los Angeles-based Prospect Health System on July 1 for $708 million.
Astrana, formerly known as Apollo Medical Holdings, entered into a $745 million definitive agreement for the company in November. The purchase includes Prospect Health Plan, Prospect Medical Groups, Prospect Medical Systems, RightRx and Tustin, Calif.-based Foothill Regional Medical Center. Prospect’s medical groups comprise more than 11,000 providers across Arizona, Southern California, Rhode Island and Texas.
“The updated purchase price underscores the company’s commitment to disciplined capital deployment, while maintaining full conviction in the value creation potential of the asset,” according to a July 2 news release.
Astrana expects Prospect to contribute around $1.2 billion in total revenue and $81 million in adjusted EBITDA on a one-year basis. It also expects to realize $12 million to $15 million of synergies in the next 12 to 18 months, the release said.
The purchase comes after Prospect sought Chapter 11 protection in January and has been working to offload many of its 16 hospitals amid financial challenges. The company shuttered its Upland, Pa.-based Crozer Health, including the closures of Upland-based Crozer-Chester Medical Center on May 2 and Ridley Park, Pa.-based Taylor Hospital on April 26.
In late June, Prospect’s Orange, Calif.-based Prospect Medical Group said it plans to lay off 125 employees due to “the sale of Prospect’s assets” at the facility.
At the Becker's 11th Annual IT + Revenue Cycle Conference: The Future of AI & Digital Health, taking place September 14–17 in Chicago, healthcare executives and digital leaders from across the country will come together to explore how AI, interoperability, cybersecurity, and revenue cycle innovation are transforming care delivery, strengthening financial performance, and driving the next era of digital health. Apply for complimentary registration now.