Aya Healthcare Terminates $615M Merger with Cross Country Healthcare Amid Regulatory Hurdles

Digital staffing company Aya Healthcare has announced the termination of its proposed $615 million acquisition of travel nursing company Cross Country Healthcare. The decision comes after facing significant regulatory challenges and an extended review process by the Federal Trade Commission (FTC).

Regulatory Concerns Halt Merger

Aya Healthcare cited the "burdens of gaining regulatory clearance" as the primary reason for walking away from the deal. The FTC had raised substantial competitive concerns about the proposed acquisition, which would have combined two of the largest firms providing software and services for temporary healthcare staffing.

Daniel Guarnera, FTC Bureau of Competition Director, stated that the merger "would have eliminated head-to-head competition between two of the largest firms providing the software and services that hospitals use to find, hire, and manage their pools of traveling nurses and other temporary healthcare workers."

The regulatory body expressed worry that further consolidation in this market could potentially reduce options for healthcare workers, increase hospitals' expenses, and ultimately raise healthcare costs for patients.

Impact on Industry and Strategic Priorities

Initially announced in December 2024, the merger was valued at approximately $615 million, with Aya Healthcare offering to acquire Cross Country Healthcare for $18.61 per share in cash. The companies had envisioned leveraging their complementary tech-enabled workforce solutions to expand innovative offerings across the healthcare industry.

Emily Hazen, CEO of Aya Healthcare, expressed disappointment but remained optimistic about the company's future: "We are proud of the collaboration and effort that went into this process and remain confident in Aya's ability to lead the industry forward and continue delivering exceptional experiences for our clients and clinicians."

Despite the setback, Aya Healthcare plans to refocus on its long-term strategic priorities, including accelerating innovation, strengthening its technology platform, and expanding its products and services across the healthcare industry.

M&A Landscape in Healthcare Staffing

The termination of this high-profile merger highlights the complex landscape of mergers and acquisitions in the healthcare staffing sector. Both Aya Healthcare and Cross Country Healthcare have been active in pursuing M&A deals to expand their capabilities and market reach.

In 2023, Aya Healthcare acquired several companies to enhance its AI and data science capabilities, including Winnow AI, Flexwise Health, and Polaris AI. Similarly, Cross Country Healthcare made strategic acquisitions in 2022, such as Mint Medical Physician Staffing, Lotus Medical Staffing, and Hireup Leadership, to strengthen its position in various healthcare staffing segments.

As the industry continues to evolve, companies in the healthcare staffing sector will likely reassess their growth strategies in light of increased regulatory scrutiny and changing market conditions.