Teladoc Health merges with Livongo Health in $ 18.5 billion deal


The field of virtual care was reduced a bit Wednesday morning. Santé Teladoc (NYSE: TDOC) will acquire Livongo health (NASDAQ: LVGO) for a combination of cash and stocks that stands at $ 18.5 billion based on Teladoc’s closing price on Tuesday.

Under the terms of the deal, which was approved by the boards of directors of both companies, investors will receive 0.592 Teladoc Health shares plus $ 11.33 in cash for each Livongo share they hold. Upon completion of the acquisition, the former shareholders of Livongo will own approximately 42% of the total outstanding shares of the new company.

Image source: Getty Images.

Last week, Teladoc Health reported that its second quarter revenue jumped 85% year-over-year to $ 241 million; Livongo’s income grew even faster. Along with the news of the merger, Livongo on Wednesday morning announced second quarter results that exceeded expectations on the upper and lower lines.

In the second quarter, Livongo’s total revenue soared 125% year-over-year to $ 91.9 million, $ 5.2 million above analyst consensus expectations. He also reported adjusted earnings of $ 0.11 per share, which was $ 0.10 above the consensus estimate.

The new Goliath combined virtual care system is expected to generate total revenue of $ 1.3 billion this year, with adjusted profit of $ 120 million.

Livongo’s Diabetes Department sends personalized, timely health feedback to over 410,000 members, helping them manage their disease more effectively. After the acquisition, that number will most likely increase, as will the use of its more recently launched weight management and hypertension services, given that many of the tens of millions of people in the United States with health plans that include access to Teladoc Health are managing chronic illnesses.


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