Leaders of San Diego-based software and staffing firm Aya Healthcare Inc. agreed to pay $615 million in cash for publicly traded Cross Country Healthcare Inc.. The deal, which needs approval from Cross Country investors, is expected to close by the middle of next year.
The proposed acquisition will allow Aya to expand its services into non-clinical settings, such as schools and homes, while growing its network in travel nursing, allied health and interim leadership work, among other things. Cross Country will retain its brand under Aya’s leadership and John Martins, its president and CEO, will remain “to ensure a seamless transition.”
Aya is home to more than 4,500 people. Cross Country ended 2023 with approximately 2,300 corporate employees (the companies’ announcement noted that Aya plans to maintain a large presence at Cross Country’s headquarters in Boca Raton, Florida) and an average of more than 10,800 full-time equivalent employees in the field last year.
“We are uniquely positioned to deliver enhanced value to our healthcare systems, schools, physicians and non-clinical professionals,” said Alan Braynin, president and CEO of Aya. “Aya and Cross Country will operate as separate brands, supporting each other with greater access to candidates and expanding placement opportunities for physicians.”
The acquisition deal between Aya and Cross Country calls for a $20 million breakup fee if the deals fall through for various reasons, including if Cross Country principals reach a better deal with an unsolicited suitor or if Aya finds herself with antitrust problems.
For Cross Country, the sale announcement comes after roughly two years of cuts following a surge in healthcare workforce during and immediately following the COVID-19 pandemic. In 2022, Cross Country’s top line grew nearly 70 percent to more than $2.8 billion and its operating profits nearly doubled to $273 million.
But the decline since then has been harsh: Revenue and operating income fell 28 percent and 60 percent, respectively, last year and Cross Country is on track to post 2024 revenue of only about $1.3 billion. millions. Over nine months, the company had suffered more than $13 million in operating losses.
Speaking to analysts a month ago, after Cross Country reported its third-quarter results, Martins said things were looking up a bit. But only a little.
“We are encouraged […] that demand continues to inch forward,” Martin said. “We’re not in the race, but we’re certainly in a better place than we were at the start of the quarter.”
That the hiring-free days have faded from the rearview mirror is also evident in Cross Country’s stock price: Aya’s purchase price of $18.61 was nearly 70 percent above the stock price. Cross Country shares (Ticker: CCRN) had been trading before the news. In October 2022, shares briefly changed hands above $38.
