DarioHealth, a provider of digital therapeutics for chronic conditions, announced that it is expanding its digital chronic-disease-management business beyond diabetes and hypertension with the acquisition of Upright Technologies, a musculoskeletal (MSK) health company that specializes in wearable posture correction devices and digital coaching.
Dario will be adding Upright’s MSK solution to its digital therapeutic platform, a multi-chronic condition platform with approximately 150,000 users.
The acquisition is expected to close by February 7, 2021.
Dario agreed to acquire Upright for $31 million with $29.5 paid in stock and $1.5 million in cash. Upright’s unaudited revenues for 2020 are estimated to reach approximately $12.8 million.
After closing the acquisition, Upright’s CEO and co-founder Oded Cohen will serve as Dario’s General Manager of MSK product and join Dario’s Board of Directors.
Upright is a digital MSK health company focused on preventing and treating the most common MSK conditions through behavioral science, biofeedback, coaching, and wearable tech. The company has over 90,000 active users, and its clinically validated solution is recommended by more than 500 clinics worldwide.
“MSK represents substantial costs to our customers and drives a large percentage of employee absenteeism and lost productivity. It is consistently one of the top priorities for clinical improvement and cost reduction for self-insured employers and health plans. Adding Upright’s solution to our integrated platform will substantially expand our opportunity to address a broader spectrum of our customers’ needs,” said Rick Anderson, Dario’s President and General Manager of North America.
“In addition, Upright’s focus on building a solution loved by its members, its high level of engagement, and proven approaches in driving sustainable behavior change, make it the perfect fit for us. Our commercial team is excited to take our new integrated solution to current and prospective customers.”
DarioHealth also announced that it would raise $70 million through a private placement of its common stock. Dario has executed securities purchase agreements to sell an aggregate of 3,278,688 shares of its common stock at a purchase price of $21.35 per share.
Investors in the private placement included Nantahala Capital Management, Perceptive Advisors, Driehaus Capital Management, Farallon Capital Management, Pura Vida Investments, Phoenix Insurance, More Provident Funds, and others. Cowen served as financial and capital markets advisor to Dario for the acquisition transaction and private placement. Cowen, Stifel, and SternAegis Ventures served as placement agents for the financing.
Dario intends to use the net proceeds from the offering for general corporate purposes.
A total of 184 digital health companies were acquired in 2020, compared to 169 in 2019, a 9% increase in M&A activity in year-over-year, according to Mercom’s Q4 and 2020 Digital Health Funding and M&A Report.
More recently, Boston Scientific, a medical technology company, agreed to acquire Preventice Solutions, the developer of wearable patches that monitor cardiac arrhythmias remotely, for $925 million, with as much as $300 million in potential commercial milestones on the table as well.