Telemedicine firm Teladoc Health has agreed to merge with Livongo, a digital chronic care management company, according to a Wednesday announcement.
The agreement, which has been approved by the board of directors at both companies, is valued at $18.5 billion. Jason Gorevic, Teledoc’s current CEO, will remain the chief executive of the newly formed company, which will stick with the Teladoc name along with its headquarters in New York.
The new organization is on track to tally approximately $1.3 billion in revenue this year. Both organizations have seen their stock prices skyrocket during the pandemic as demand for virtual healthcare continues to grow. As of this writing, both companies’ stock prices are down more than 8%.
“This merger firmly establishes Teladoc Health at the forefront of the next-generation of healthcare,” Gorevic said in an Aug. 5 statement. “Livongo is a world-class innovator we deeply admire and has demonstrated success 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.”
Under the agreement, each share of Livongo will be exchanged for 0.5920 times a share of Teladoc and $11.33 in cash. After the merger closes, shareholders of the latter will own 58% of the new company, while Livongo shareholders will own 42%.
Over the past several years Teladoc has been growing into a virtual healthcare giant, purchasing telehealth solutions company InTouch for $600 million in January. It also advanced its global footprint with a 2018 buyout of Advance Medical, a virtual care provider in Spain.
Matt joined Chicago’s TriMed team in 2018 covering all areas of health imaging after two years reporting on the hospital field. He holds a bachelor’s in English from UIC, and enjoys a good cup of coffee and an interesting documentary.