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2020-08-09| M&A

Teladoc Health, Livongo Join Hands for Global Healthcare Delivery, Access, and Experience

by Tulip Chakraborty
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On August 5th, Teladoc Health (TDOC), touted as the world leader in virtual care, announced a merger agreement with Livongo (LVGO), a pioneer in applied health signals to improve delivery and access to healthcare for patients globally and offer high-quality, personalized treatment.

By T. Chakraborty, Ph.D.

According to the terms of the agreement, each share of Livongo will be exchanged for a value of 0.5920 times the shares of Teladoc Health and will include cash consideration of $11.33, cumulatively yielding a total value of $18.5 billion, which is established on the closing price of Teladoc Health shares as of August 4th. Once the merger has deemed completion, Teladoc Health shareholders will own around 58 percent of the combined company, while Livongo shareholders will own approximately 42 percent. The resultant of this merger enables the combined company to have an adjusted EBITDA of over $120 million for the year 2020.

Jason Gorevic, CEO of Teladoc Health, stated that “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 in improving the lives of people living with chronic conditions. Together, we will further transform the healthcare experience from preventive care to the most complex cases, bringing ‘whole person’ health to consumers and greater value to our clients and shareholders as a result.”

Glen Tullman, Livongo Founder and Executive Chairman, further added, “This highly strategic combination will create the leader in consumer-centered virtual care and provides a unique opportunity to further accelerate the growth of our data-driven member platform and experience. 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 recognizes Livongo’s significant progress and will enable Livongo shareholders to benefit from the long-term upside. The combined company is positioned to serve an even larger addressable market with a truly unmatched offering.”

The joining of Teladoc Health and Livongo has significant financial and strategic benefits, which helps in solidifying their position as a top healthcare provider. The combined forces of leaders in virtual health and chronic condition management imply broad clinical expertise coupled with data-driven experience. Additionally, with the help of data science, personalized and timely health signals will be transmitted to the patient, thus creating a rigorous virtual healthcare delivery system. The platform will feature data-driven signals for patients and physicians, therapists, and leading global specialists available at any point in the day to provide quality service.

In most public care systems, patients need to wait an extraordinarily long time to see a physician, which at times can prove to be fatal. Teladoc Health and Livongo aim to change this scenario by proactively monitoring their health, including if they are at risk of, or living with, chronic conditions or need care in general. The platform will have valuable information and insights to stay fit and avoid any illness progression, which can be accessed anytime by the patients. The global reach of Teladoc Health includes approximately 70 million customers in the US alone alongside access to data from Medicare and Medicaid, which provides Livongo a much better opportunity to help millions of new consumers surviving with chronic diseases.

Teladoc Health and Livongo aim to serve the underserved communities which are in dire need of proper healthcare. As the majority of the underserved companies suffer from chronic conditions that happen to be Livongo’s focus, the combined company will be globally positioned to revolutionize the healthcare space.

Related Article: Dr. Joseph Kvedar: The Potential of Telemedicine in the Era of Digitalization

References
  1. https://teladochealth.com/newsroom/press/release/livongo-merger/

 

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