Teladoc Health, a telemedicine and virtual healthcare company, has entered into a definitive agreement to acquire InTouch Health, a provider of telehealth solutions for hospitals and health systems, for $600 million, which consists of $50 million in cash and $450 million of Teladoc Health common stock.
This acquisition further reinforces the Teladoc Health virtual care strategy and helps to expand its services across the world.
‘‘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,” said Jason Gorevic, chief executive officer, Teladoc Health said in the press 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.”
InTouch has partnerships in place with over 450 hospitals and health systems with 14,500 physician users globally and gives support in more than 40 clinical use cases.
InTouch is expected to generate $80 million in revenues in 2019, up 35% from 2018.
According to a 2019 JPMorgan research, 40% of hospitals are planning to increase their budgets for telemedicine solutions. According to L.E.K. 2018 Hospital Study Survey, 61% of hospital revenue projected to come from value-based and managed care models by 2021, virtual care will be a central strategy to improve consumer engagement, ensure consistent quality, and control health care’s rising costs.
Lazard acted as a sole financial advisor, and Latham & Watkins acted as legal advisor to Teladoc Health. J.P. Morgan acted as an exclusive financial advisor, and Wilson Sonsini Goodrich & Rosati acted as legal advisor to InTouch Health.
According to Mercom’s 2019 Digital Health Funding and M&A Report, Telehealth companies raised $1.8 billion in 2019 compared to $1.3 billion in 2018, a 42% rise Year-over-Year.
Babylon, a London-based telemedicine company that uses AI, secured $550 million at more than $2 billion valuation.
Presidium Health, a virtual care platform that delivers acute and chronic disease management services, raised $3.5 million.
Maple, a provider of online or telephone consultations with doctors for advice, diagnosis, and prescriptions raised $14.5 million.