The Strategist

Online healthcare firms Teladoc and Livongo sign $18.5B merger

08/06/2020 - 04:47

The American company Teladoc Health, which specializes in telemedicine and online medical services, bought its competitor Livongo Health. The deal amounted to $ 18.5 billion.

The merger reflects the rise in popularity of online healthcare-related services during the COVID-19 pandemic, when many patients around the world were denied access to routine medical care. The shares of both companies have risen strongly since the beginning of the year, with Teladoc shares up by 200% and Livongo shares up by 477%.

Teladoc shareholders will pay 0.59 of their share and $ 11.3 in cash for one share of Livongo, making the premium over the value of Livongo shares on Tuesday trading at 10%. Teladoc shareholders will hold 58% of the combined company, which will continue to be called Teladoc Health, with the remainder in the hands of Livongo's current shareholders. The combined company's headquarters will also remain in Perchase, New York, with current Teladoc CEO Jason Gorevic as its head.

Teladoc, founded in 2002, is one of the largest players in the American telemedicine market, and it also operates in more than a hundred other countries. In recent years, it has already made several acquisitions of its competitors, including Best Doctors and Advance Medical. Livongo is a newer and more specialized company, mainly developing online services for people with chronic conditions. The combined number of customers is expected to reach 70 million, and its combined revenues in 2020 will amount to $ 1.3 billion, up 85% from a year earlier.


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