By Christy Santhosh

(Reuters) -Healthcare service provider Premier said on Monday it has agreed to be taken private by an affiliate of investment firm Patient Square Capital in a deal valued at about $2.6 billion.

Premier works with hospitals, health systems, and other providers to cut costs and improve patient care by coordinating the purchase of equipment and supplies.

"As the healthcare landscape continues to rapidly evolve, transitioning to private ownership will once again enhance the company's financial flexibility," Premier CEO Michael Alkire said.

In early 2023, Premier began evaluating strategic options, which included a potential sale of part or all of the company, or other partnerships. Very soon, the company sold certain non-healthcare operations to Omnia Partners for about $800 million, allowing Premier to focus on its core healthcare business.

Leerink analyst Michael Cherny said a "go-private transaction seems logical" noting the constant dislocation between Premier's value as a partner to health systems versus its value in the public markets.

"Given that private equity in general has a significant amount of untapped funds, we would not be surprised to see further transactions across the broader universe for companies in similar situations," added Cherny.

Patient Square will pay $28.25 in cash per share for Premier, a premium of 9.7% to the stock's last close on Friday. The deal is expected to close by the first quarter of 2026.

Shares of North Carolina-based Premier rose 8.7% to $28 premarket.

(Reporting by Christy Santhosh in Bengaluru; Editing by Shilpi Majumdar and Shailesh Kuber)