Cencora has signed a definitive agreement to acquire American Oncology Network, a physician-led network of more than 350 oncology providers operating across 21 states, in a transaction that values AON at approximately $2.4 billion. The deal is set to expand Cencora’s physician-led oncology management services organization platform and extend its geographic presence into 12 additional states.
A Strategic Move in Physician-Led Cancer Care
American Oncology Network supports independent oncology practices through a combination of services, technology, and infrastructure, all designed to help physicians deliver community-based cancer care. Cencora currently holds an approximately 4% ownership stake in AON and has agreed to acquire the remaining equity interests through this oncology network acquisition.
The $2.4 billion enterprise value includes approximately $2.3 billion payable at closing, along with contingent value rights of up to $100 million, subject to specified conditions. Certain AON shareholders may elect to roll over equity representing up to 25% of the company. If those shareholders retain a 25% interest, Cencora expects to pay approximately $1.7 billion at closing, increasing its ownership position to 75%.
Cencora has indicated that the acquisition is expected to be accretive to adjusted diluted earnings per share in the second year following the close of the transaction.
Supporting Independent Oncology Practices
AON operates a physician-led model specifically designed to support independent oncology practices while keeping clinical decisions in the hands of physicians. Cencora stated that the transaction is expected to provide AON with additional resources to expand integrated patient services, enhance technology and practice support capabilities, and continue adding physicians and practices to its network.
Robert P. Mauch, President and Chief Executive Officer of Cencora, commented on the transaction: “The acquisition of AON will expand our physician-led oncology MSO and support of care in communities across the country. AON serves as a trusted partner to oncology practices with a differentiated solution set designed to meet their comprehensive needs. With the addition of AON to our leading MSO network, we will enhance our capabilities for independent practices, strengthening patient access to high-quality, cost-effective care, while fortifying our growth platform to drive long-term value for our stakeholders.”
Todd Schonherz, Chief Executive Officer of American Oncology Network, also addressed the agreement: “Our physicians, clinicians and care teams, and the patients they serve, have always been at the heart of AON, and this agreement is about giving them more support, more resources and more time for patient care. This is the next chapter of the same mission: high-quality, accessible cancer care delivered close to home, led by physicians who know their patients best. As an investor in AON since 2020 and a leader in oncology, Cencora understands that mission and will partner with us to accelerate that goal.”
Stephen “Fred” Divers, M.D., Chief Medical Officer of American Oncology Network, added: “For patients facing a cancer diagnosis, ensuring dependable access to advanced and innovative therapy is crucial to their survival. This partnership will bolster AON’s mission of sustainably delivering the highest quality care to patients in their own communities.”
Transaction Approvals and Advisory Teams
The acquisition is subject to customary closing conditions, including regulatory clearances and approval from AON shareholders. AON’s Board of Directors approved the agreement following the unanimous recommendation of a special committee composed of independent and disinterested directors.
On the advisory front, Citi is serving as lead financial advisor to Cencora, with J.P. Morgan Securities also advising the company. Holland & Knight and Sidley Austin are serving as legal advisors to Cencora.
Moelis & Company has been engaged as exclusive financial advisor to the special committee of AON’s Board of Directors. McDermott Will & Schulte is serving as legal counsel to AON, while Cleary Gottlieb Steen & Hamilton is advising the special committee.
