Cigna’s health services subsidiary Evernorth entered into a definitive agreement to acquire MDLIVE, a telehealth company.
The financial terms of the deal were not disclosed.
The acquisition comes more than five months after a $50 million equity investment round from Sixth Street Growth, the growth investing arm of Sixth Street, an investment firm. Founded in 2009, MDLIVE has raised nearly $200 million in equity funding to date.
The company’s existing investors include Cigna Ventures, Health Care Service Corporation, Health Velocity Capital, Novo Holdings, Industry Ventures, Sentara Healthcare, Sutter Health, Heritage Group, and Bedford Funding Capital.
MDLive reported a significant growth in the telehealth business accelerated due to the COVID-19 pandemic. The company said that virtual visits nearly doubled in the first half of 2020, while total bookings grew by over 300%.
The company also highlighted over 500% year-over-year growth in its behavioral health visit volumes through July, more than 350% for dermatology, and over 80% for general medical care.
MDLive delivers services including urgent care, dermatology, therapy, and psychiatry via its certified clinicians’ network. Over the years, it is offered its virtual care services directly to consumers while also partnering with health systems, employers, and payers (including Cigna) to extend hospital care or provide virtual care as a member benefit.
Through the acquisition, both companies expect to drive earlier identification and diagnosis of chronic care needs, make faster referrals to high-quality providers, and ensure patients have access to the right and affordable site of care, according to the release.
“Becoming part of the Evernorth portfolio is an opportunity for MDLIVE to join an organization that complements our work, and has been a long-time partner and investor in our business,” said Charles Jones, Chairman and Chief Executive Officer of MDLIVE.
“Together, we can accelerate MDLIVE’s growth strategy and ability to serve more customers, while also building new services that will benefit our existing stakeholders, including employees, partners, patients, customers, health plans, and providers. With this transaction, Evernorth will gain an industry-leading platform, and a passionate and pioneering workforce that made virtual care a reality, and an essential and life-saving service during the COVID-19 pandemic.”
Advisors: BofA Securities acted as exclusive financial advisor to MDLIVE, and Davis Polk & Wardwell served as legal counsel. Greenhill & Co. served as an exclusive financial advisor to Cigna. Wachtell Lipton Rosen & Katz served as legal counsel, and Sheppard, Mullin, Richter & Hampton acted as regulatory counsel to Cigna.
A total of 184 digital health companies were acquired in 2020, compared to 169 in 2019, a 9% increase in year-over-year M&A activity, according to Mercom’s Q4 and 2020 Digital Health Funding and M&A Report. Learn more about digital health M&A activity.
