Teladoc Health and Livongo plan to merge in $18.5bn deal

6 Aug 2020252 Views

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Teladoc will combine its virtual care services with Livongo’s data-driven approach to managing chronic conditions.

On Wednesday (5 August), New York-based telehealth platform Teladoc Health announced its plans to take over Livongo in an $18.5bn deal. It comes as the Covid-19 pandemic has accelerated the adoption of digital health solutions.

Teladoc said that the merger represents a “transformational opportunity” to improve the delivery, access and experience of healthcare, enabling clients to offer high-quality, personalised, technology-enabled longitudinal care.

Based in Mountain View, California, Livongo develops software and hardware for connected devices that can be used to manage conditions such as diabetes and hypertension. The company, founded in 2008 by Glen Tullman, uses artificial intelligence to interpret health data and create actionable, personalised health advice to members.

Terms of the merger

The merger will combine Teladoc Health’s integrated services across virtual care with Livongo’s data-driven approach to create a virtual healthcare delivery system.

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The deal has been agreed upon by each company’s board of directors. Upon completion of the merger, existing Teladoc Health shareholders will own approximately 58pc of the combined company and Livongo shareholders will own approximately 42pc.

Each share in Livongo will be exchanged for 0.592 Teladoc Health shares, plus cash consideration of $11.33 for each Livongo share. This would value the deal at $18.5bn, based on the closing price of Teladoc shares on 4 August. The newly merged company has an expected 2020 pro-forma revenue of roughly $1.3bn.

Jason Gorevic, CEO of Teladoc Health, commented: “This merger firmly establishes Teladoc Health at the forefront of the next generation of healthcare. Livongo is a world-class innovator we deeply admire and has demonstrated success improving the lives of people living with chronic conditions.”

Tullman added: “By expanding the reach of Livongo’s pioneering applied health signals platform and building on Teladoc Health’s end-to-end virtual care platform, we’ll empower more people to live better and healthier lives.

“This transaction recognises Livongo’s significant progress and will enable Livongo shareholders to benefit from long-term upside as the combined company is positioned to serve an even larger addressable market with a truly unmatched offering.”

Kelly Earley was a journalist with Siliconrepublic.com

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