Amazon said on Thursday that it had reached a deal to acquire One Medical, a network of primary care clinics, in a deal worth $3.9 billion, a big step in the e-commerce giant’s plans to become a player in the health care industry.
One Medical, which is 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 Amazon had started to offer.
Amazon will acquire One Medical for $18 per share in an all-cash transaction, it said in a statement. The deal will require approval from One Medical’s shareholders and regulators.
“We think health care is high on the list of experiences that need reinvention,” Neil Lindsay, the senior vice president of Amazon Health Services, said in the statement.
The deal is the first major acquisition under Andy Jassy, who took over as Amazon’s chief executive last year when founder Jeff Bezos stepped down. Mr. Jassy has told investors he would rein in costs, though the acquisition shows he will not shy away from strategic investments at the right price.
One Medical, a former Silicon Valley “unicorn,” a term for a start-up valued by investors at $1 billion or more, went public in 2020 at $22.07 a share. After hitting a peak of $58.70 last year, its stock price closed on Wednesday at $10.18.
“We look forward to innovating and expanding access to quality healthcare services, together,” said One Medical’s chief executive, Amir Dan Rubin, who will remain in his post after the deal closes.
In 2019, Amazon began running its own primary and urgent 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, though it has been expanding its physical clinics.
Amazon Care has tried to get other employers to offer the service, though it has not had much success. In announcing a national expansion this year, it promoted Silicon Labs, TrueBlue and Whole Foods Market, which Amazon owns, as clients.
One Medical is far larger, with more than 8,500 employers signed up as customers. One Medical also offers memberships directly to consumers.
Amazon’s ambitions to be a health care player accelerated in 2018, when it spent $753 million to buy the start-up PillPack, an online pharmacy, in an effort to grab a piece of the $560 billion prescription drug industry.