Teladoc Health Inc. TDOC, -14.47% and Livongo Health Inc. LVGO, -7.17% said Wednesday they have agreed to merge in a deal valued at $18.5 billion to create a company that can serve a spectrum of health needs, using virtual care. Under the terms of the deal, Livongo shareholders will receive 0.592x shares of Teladoc plus $11.33 in cash per share owned. Teladoc shareholders will own abut 58% of the combined entity, while Livongo shareholders will own the remaining 42%.
The combination “creates a global leader in consumer centered virtual care,” the companies said in a joint statement. The new entity is expected to have pro forma revenue of about $1.3 billion for 2020, equal to pro forma growth of 85%. “Livongo is a world-class innovator we deeply admire and has demonstrated success improving the lives of people living with chronic conditions,” Teladoc Chief Executive Jason Gorevic said in a statement. Together, we will further transform the healthcare experience from preventive care to the most complex cases, bringing ‘whole person’ health to consumers and greater value to our clients and shareholders as a result.”
The deal is expected to close in the fourth quarter. The combined company is expected to generate revenue synergies of $100 million by the end of the second year after the deal closes and to achieve $500 million on a run rate basis by 2025. Read more from market watch
