Apollo Medical Holdings Stock Rises as Astrana Health Acquires Prospect Health for $708 Million
- Astrana Health acquired Prospect Health for $708 million, enhancing patient-centered care across multiple states.
- The acquisition is projected to generate $1.2 billion in annual revenues and $81 million in adjusted EBITDA.
- Astrana aims to reduce net leverage to below 2.5x while improving overall financial health and sustainability.
Astrana Health Expands Footprint with Strategic Acquisition of Prospect Health
Astrana Health, Inc. solidifies its position in the healthcare sector through the recent acquisition of Prospect Health, an integrated care delivery network, for a revised total of $708 million. This decision, finalized on July 1, 2025, marks a strategic move for Astrana, enabling the company to enhance its capabilities in providing patient-centered care across multiple states, including Southern California, Texas, Arizona, and Rhode Island. By integrating Prospect Health, which serves over 600,000 members with a network of more than 11,000 providers, Astrana is poised to significantly improve its service offerings and operational efficiency.
The acquisition not only broadens Astrana's reach but also presents substantial financial benefits. With projected annual revenues of approximately $1.2 billion and adjusted EBITDA of $81 million from Prospect Health, the company anticipates realizing operational synergies worth between $12 million and $15 million within the next 18 months. This integration is expected to bolster Astrana's overall revenue guidance for 2025, adjusting total revenue projections between $3.1 billion and $3.3 billion, alongside a target adjusted EBITDA of $215 million to $225 million. Such growth reflects Astrana's commitment to enhancing the healthcare ecosystem while maintaining a strong focus on patient outcomes.
Brandon Sim, President and CEO of Astrana, emphasizes the importance of this acquisition in the company's journey toward delivering high-quality care. He expresses eagerness to integrate the experienced team and resources of Prospect Health, which will ultimately lead to improved patient outcomes and increased value within the healthcare landscape. Additionally, Astrana's proactive approach to capital management, supported by a term loan from Truist Securities and a syndicate of banks, highlights its commitment to disciplined financial practices while prioritizing value creation.
In other relevant developments, Astrana's consolidated balance sheet will reflect approximately $700 million in net debt following this transaction. The company's commitment to reducing its net leverage ratio to below 2.5x within the next year and a half demonstrates a strategic focus on financial health and sustainability. As Astrana navigates this significant transition, the healthcare industry watches closely to see how this acquisition will shape the future of patient-centered care delivery.
