Teladoc to acquire InTouch Health for US 600 M
Teladoc reached an agreement to acquire InTouch Health for $600 million, including $150 million in cash. The deal is expected to add roughly $80 million to Teladoc’s top line.
Publicly-traded telehealth company Teladoc will acquire competitor InTouch Health for $600 million. The deal is expected to boost Teladoc’s top line and extend its presence across hospitals and health systems.
The $600 million deal will include $150 million in cash and $450 million of Teladoc common stock. The company’s stock was valued at $85.37 at market close on Friday. The deal is expected to close by mid-2020.
”Today marks a bold leap forward in Teladoc Health’s mission to transform how high-quality healthcare is accessed and experienced, making virtual care available for patients with even the most critical care needs,” Teladoc CEO Jason Gorevic said in a news release. “Bringing these companies together will make Teladoc Health the clear virtual care leader across every front door of healthcare, further accelerating the adoption and impact of virtual care for millions of people around the world.”
Headquartered in Santa Barbara, InTouch Health serves more than 450 hospitals and health systems. The company was founded in 2002 and has raised just over $49 million in funding to date. InTouch is expected to bring 2019 revenues of $80 million, up 35 percent from the previous year.
While Teladoc is well-known among consumers, InTouch Health’s software also supports communication between healthcare providers. Combined, the companies will be able to provide telehealth services for all levels of acuity, from critical care to everyday visits.
“Now is the perfect time for us to join together with Teladoc Health and deliver to hospitals and health systems everywhere what they’ve been asking for – a single, enterprise solution to support their virtual care strategies and enable them to better engage with patients at every point along their healthcare journey,” InTouch Health CEO Joseph DeVivo said in a news release. “Whether it’s extending clinical capabilities, augmenting physician resources or supporting optimized outcomes, we are that trusted single partner to support them.”
Telehealth utilization among employees still remains fairly low even though a majority of employers offer it. But on the hospital side, more and more hospitals are seeking to invest in virtual care. As Teladoc’s own press release noted, research from JPMorgan in 2019 found that 40% of hospitals were planning to increase their budgets for telemedicine solutions.
Which likely made InTouch Health attractive to Teladoc.
Meanwhile, some industry observers and digital health experts on Twitter commented that this large deal likely will signal some belated digital health industry consolidation.