Oak Street Health Acquires Telehealth Company RubiconMD for $130 Million

Oak Street Health, a network of value-based primary care centers focused on the Medicare population, acquired RubiconMD, a provider of telehealth specialty consults to primary-care doctors, for $190 million.

RubiconMD, which provides a network of specialists providing care in cardiology, nephrology, and pulmonology, has raised over $40 million in funding to date. Investors include Deerfield Management Company. Existing investors Optum Ventures, HLM Venture Partners, Waterline Ventures, and Heritage Provider Network.

“Oak Street Health is on a mission to rebuild healthcare as it should be, which we are doing by focusing on preventive care and driving more resources into the primary care setting,” said Mike Pykosz, Chief Executive Officer of Oak Street Health.

“Like traditional primary care, specialty care is broken for older adults, but together with RubiconMD, we can rebuild it into a model that meets patient needs. Integrating and virtualizing specialty care into Oak Street Health’s innovative model enables us to improve access, experience, and coordination for patients while substantially lowering costs. RubiconMD’s technology platform and national footprint allows us to scale the model across our current and future markets to further our mission.”

A total of 136 digital health companies were acquired in the first half (1H) of 2021, compared to 83 in 1H 2020, according to Mercom’s 1H 2021 Digital Health Funding and M&A Report.

Kirkland & Ellis acted as legal counsel to Oak Street Health. Gunderson Dettmer Stough Villeneuve Franklin & Hachigian acted as legal counsel, and Cantor Fitzgerald & Co. acted as exclusive financial advisor to RubiconMD in connection with the transaction.

Telemedicine companies led M&A activity with 25 transactions during 1H 2021, compared to 8 in 1H 2020. In 1H 2021, Accolade, a provider of cloud-based, on-demand technology-enabled healthcare concierge services for employers, health plans, and health systems, acquired PlushCare, a virtual primary care platform for $450 million; and Innovation Specialists (dba 2nd.MD), a telemedicine company, for $460 million.