Teladoc Health early Wednesday announced it would acquire highflying telehealth rival Livongo for stock and cash valued at about $18.5 billion. But investors balked at the deal, sending both TDOC stock and LVGO stock down.
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Livongo Health and Teledoc (TDOC) announce merger agreement
Under the terms of the agreement, which has been unanimously approved by the Board of Directors of each company, each share of Livongo will be exchanged for 0.5920x shares of Teladoc Health plus cash consideration of $11.33 for each Livongo share, representing a value of $18.5 billion based on the closing price of Teladoc Health shares as of August 4, 2020. Upon completion of the merger, existing Teladoc Health shareholders will own approximately 58 percent and existing Livongo shareholders will own approximately 42 percent of the combined company.
The combination of Teladoc Health and Livongo creates a global leader in consumer centered virtual care. The company will have expected 2020 pro forma revenue of approximately $1.3 billion, representing year over year pro forma growth of 85 percent. Demonstrating the power of the combined platform and the scalability of the data driven and virtual ethos, the combined company is expected to have pro forma Adjusted EBITDA of over $120 million for 2020.
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Livongo sells remote-monitoring solutions for patients with diabetes, hypertension, behavioral health conditions or weight management needs.
Patients use its medical devices and platform to keep tabs on their health metrics. The Livongo system sends health care reminders to users, and suggests ways they can stay on track.
