Dive Brief:
Travel nursing agency Aya Healthcare abandoned its $615 million acquisition of staffing technology services provider Cross Country Healthcare last week after prolonged review from antitrust regulators.
The Federal Trade Commission on Friday said it had identified “significant competitive concerns” with the acquisition. Cross Country said the 43-day government shutdown last month extended antitrust review past the deal’s termination date, forcing the companies to scrap the acquisition.
The companies said the acquisition would have extended Aya’s technology services into non-clinical settings, including schools and homes, and solidified both companies’ reach into the healthcare staffing market. The FTC said the deal would have eliminated competition between two of the largest staffing software providers.
Dive Insight:
Hospitals utilize staffing software to hire and manage temporary workers and contract staff. Use of contract staff, especially temporary nurses, is still elevated five years after the coronavirus pandemic, when hospitals turned more frequently to temporary staffing following widespread attrition and burnout in the sector.
Aya and Cross Country, two of the largest healthcare staffing companies in the U.S., announced the acquisition in December 2024 and originally said the deal could close in the first half of 2025.
In compliance with antitrust law, the companies filed a premerger notification with the FTC on Dec. 17. The antitrust law, dubbed the HSR Act, requires companies wait to close a merger for a specific period of time, and permits regulators to request more information about the deal and extend the waiting periods.
In January, Cross Country refiled its merger notification, which extended the deal’s waiting period to Feb. 20, according to a securities filing.
The company’s waiting period was extended again to comply with requests for information and discussions with the FTC. Likewise, Aya and Cross Country extended their merger’s termination date from Sept. 3 to Dec. 3., according to Cross Country.
However, the FTC’s review period butted against the 43-day government shutdown, which started Oct. 1. As a result, the deal waiting period was delayed until Dec. 30, exceeding the merger’s new termination date, according to Cross Country.
“Cross Country’s Healthcare’s rigorous efforts to advocate for a shortened review period with the FTC were unsuccessful,” Cross Country said in a statement. “The Company remained committed to closing the transaction, however it was unable to reach an agreement with Aya Healthcare to amend and extend the Merger Agreement beyond the December 3, 2025 termination date.”
Market conditions and “extensive time and resources already invested – and those still required” to gain regulatory approval led Aya to scrap the merger, according to the company. Aya will be required to pay Cross Country a $20 million deal termination fee.
“Despite full cooperation by both parties with the FTC throughout the process, it became evident that continuing would be excessively burdensome and create prolonged uncertainty for clients, clinicians and partners,” Aya said.
Regulators said the merger risked reducing options for healthcare staffing and increasing expenses for hospitals.
“The deal 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,” FTC Bureau of Competition Director Daniel Guarnera said in a statement.
