- Acquisition brings the CanoPanorama population health management platform to 13 University facilities and over 300 University employed and affiliate providers serving approximately 24,000 Medicare Advantage members, increases Cano Health’s market penetration in Florida
- Company now projects full year 2021 adjusted EBITDA between $100 million and $110 million
Cano Health, Inc., a leading value-based primary care provider for seniors and underserved communities, and University Health Care and its affiliates, a private medical provider dedicated to comprehensive, dependable medical services in local communities, today announced Cano Health has acquired University and its affiliates for $600 million. The bolt-on acquisition to Cano Health’s proprietary population health management platform leverages Cano Health’s high quality operational and clinical care services to improve health outcomes for University patients while strengthening the company’s position in the fragmented Florida market.
Cano Health also now estimates full year 2021 adjusted EBITDA between $100 million and $110 million and reaffirms its full year 2021 membership guidance of 154,000 to 162,000 members and revenue guidance of between $1.4 billion and $1.5 billion.
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“This transaction is a significant step forward for Cano Health and our patients, as it will allow us to bring our brand of affordable, high quality primary care to more patients in the Florida market and accelerate Cano Health’s profitable growth,” said Dr. Marlow Hernandez, Co-founder, Chairman and CEO of Cano Health. “University is a premier provider of value-based care, and we are thrilled to welcome the world-class University team to the Cano Health family. Our model has proven effective at providing industry-leading outcomes while controlling costs, and we look forward to delivering care at a larger scale than ever before.”
“Protecting the legacy of our family-owned business, our relationships with providers, and our deep ties to the local community has always been important to us. Our priority every step of the way was the wellbeing of our patients and the job security of our employees,” said Maggie Quevedo, Co-Founder of University. Michael Quevedo, President of University and son of its Co-Founders commented, “In Cano Health, we immediately recognized a partner who shares our values and can help us build upon the legacy left by my father, Felix Quevedo, Sr. My brother Felix Quevedo, Jr., and I, together with our family and the entire University team, look forward to building America’s Primary Care with Cano Health. We are confident that our shared vision enables a winning combination for our patients, employees, and partners.”
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Strategic Rationale
University’s services align with the Cano Health’s model, which provides members access, quality, and wellness through a high-touch and high-tech model of care. Both companies share a similar culture, and both companies’ staff seek to build lifelong bonds with their members. Estimated standalone full-year 2021 University revenue is approximately $355 million and adjusted EBITDA is $37 million.
With this combination, Cano Health expects to continue to grow by serving its combined approximately 143,000 members in 88 medical centers, with over 1,000 staff and affiliate providers across the country.
Combining with University will:
- Add approximately 24,000 Medicare Advantage members.
- Increase Cano Health’s capitated Medicare organic membership and revenue growth due to a significant increase in clinical capacity and leveraging of Cano Health’s robust brand in the markets in which University operates.
- Create synergies by adding affiliate providers to the CanoPanorama platform and medical center operations.
- Improve University’s medical claims expense ratio through operational enhancements such as Cano@Home, a 24/7 urgency line, and care management programs.
- Leverage Cano Health’s proprietary population health management technology platform (CanoPanorama), delivering improved health incomes to a larger set of patients.
- Expand Cano Health’s leading market share in Florida, the number one Medicare Advantage market in the US.
- Deliver on Cano Health’s strategic objective to build, buy, and manage medical practices. Cano Health continues to pursue three key initiatives to realize the massive opportunity in value-based primary care: 1) organic growth, 2) new market entry and 3) targeted acquisitions.
Financial Terms
- Cano Health acquired University with $540 million in cash and $60 million in equity. The transaction was financed through cash on hand and common equity issued to University’s shareholders.
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