Lewisville, Texas-based telemedicine company Teladoc has announced plans to acquire Scottsdale, Arizona-based employee health benefits app-maker HealthiestYou for $125 million in a mix of cash and stock.
HealthiestYou, which raised $30 million from Frontier Capital in November, provided employees with an app to access a location-aware provider directory to read reviews, ratings and background information, compare prescription pricing for more than 5,000 drugs at more than 100,000 pharmacies, and receive customized alerts that help them stay on top of their benefit and savings reminders.
At the end of last year, the company had plans to add video visits with doctors on smartphones, online, and smart TVs. According to a statement from Teladoc, HealthiestYou generated $10 million in revenues in 2015 and $8 million during the first six months of 2016.
“This is a unique opportunity to combine two leaders in the telehealth industry who share a common philosophy of driving telemedicine engagement and enabling consumers to take charge of their own health care decisions,” Teladoc CEO Jason Gorevic said in a statement. “Teladoc’s and HealthiestYou’s solutions are highly complementary and together will provide richer offerings, higher levels of consumer engagement and accelerated ROI for our partners.”
Teladoc plans to close the acquisition tomorrow and will pay $45 million in cash plus 6.96 million shares of Teladoc's common stock, which the company described as having a value of about $80 million. In a statement, Teladoc said that the acquisition will give the company better access to the market of small- and medium-sized employers, a segment they consider underserved by telemedicine companies.
“For years, HealthiestYou has focused on making health care simpler to access and easier to understand," HealthiestYou cofounder Jim Prendergast said in a statement. "Marrying both companies' innovative engagement and utilization strategies, technology and service offerings will deliver on our shared goal of providing the highest quality of care through easy access to deliver significant cost savings.”
Teladoc has used strategic acquisitions to expand its offerings at least twice before. In June 2015, the company quietly acquired Stat Doctors, an app, web, and phone services that connected patients with medical questions to doctors. Prior to that, in September 2013, they acquired Miami Beach-based Consult a Doctor, which was also a play for smaller employers.
In addition to announcing the acquisition, Teladoc updated its 2016 outlook, increasing its expected revenue from between $118 million and $122 million to between $126 million and $130 million.
They revised their net loss per share from between $1.33 and $1.38 to between $1.22 and $1.27, based on a weighted average of 42.5 million shares outstanding. They predict they will have between 17 million and 18 million members and will conduct between 915,000 and 945,000 remote visits in 2016.