Correction: Updated to include financial details. A previous version of this story included an inaccurate estimate.
Nearly two years to the day after its launch was announced at a Boston conference, app-enabled healthcare transportation company Circulation has entered into an agreement to be acquired by Logisticare, the nation’s largest non-emergency medical transportation (NEMT) broker, for $44 million, plus $1 million to be paid in three years to each of the cofounders. The total sale price is $57.5 million, but since Logisticare's parent company Providence has a minority stake in Circulation, $11.5 million is going back to the buyer.
“NEMT and healthcare logistics are a critical piece of overall healthcare delivery and consumption,” Robin Heffernan, CEO and cofounder of Circulation, said in a statement. “We are passionate about improving access to healthcare and combining with LogistiCare will allow us to accelerate our impact. I look forward to working closely with the LogistiCare team to continue creating differentiated experiences for healthcare consumers.”
Circulation, which was cofounded by Heffernan and Boston Children's Hospital CIO John Brownstein, is a HIPAA-compliant platform that lets healthcare providers leverage ridesharing services like Lyft and Uber to bring patients and clinical trial participants to appointments. In the last two years, the company has grown to serve 3,000 healthcare facilities across 45 states (up from 1,500 in May) and has raised a $10.5 million funding round, as well as an unspecified seed investment by Flare Capital.
Logisticare is an NEMT management company that contracts with healthcare providers to coordinate rides to appointments for patients using a variety of modalities including ridesharing but also taxis, public transportation, mileage reimbursement, volunteer drivers, and more. Founded in 1986, Logisticare seems to be following the classic narrative of an older, larger incumbent acquiring an innovative startup.
“We are making a bold move to transform the industry,” Jeff Felton, LogistiCare CEO, said in a statement. “Since our minority investment in Circulation more than a year ago, I have witnessed firsthand their outstanding, market proven technology and its ability to enhance the patient experience. By integrating and deploying Circulation’s technology platform across the scale of LogistiCare’s nationwide operations, we will be able to continue to reduce transportation obstacles so many face.”
Logisticare intends to keep Circulation's entire management team intact. Felton said in a statement that the company has plans to see significant savings from the deal in short order.
"By integrating and deploying Circulation's technology platform across the scale of LogistiCare's nationwide operations, we are targeting synergies in excess of $25 million on a run-rate basis within the first 24 months, while also meaningfully upgrading the entire experience for our customers and their members/patients," he said. "The expected efficiencies, which if realized will allow us to recoup our investment in less than 36 months, relate to increased automation and streamlined operations across the LogistiCare organization including activities such as ride reservations, trip assignment, customer support and billing."