Telehealth market leader Teladoc Health said on Wednesday it would buy Livongo Health Inc in a cash-and-stock deal, valuing the company at $18.5 billion (14.1 billion pounds), to cash in on a rise in demand for online consultations amid the coronavirus crisis.
The pandemic has thrust the U.S. telehealth industry into the spotlight this year, spurring huge demand for virtual care and doctors visits from Americans stuck at home or unable to visit hospitals.
Under the terms of the agreement, each Livongo share will be exchanged for 0.5920x shares of Teladoc plus cash consideration of $11.33, amounting to $158.98, a 10% premium to Livongo’s closing price on Tuesday.
“This merger firmly establishes Teladoc Health at the forefront of the next-generation of healthcare,” Teladoc Health Chief Executive Officer Jason Gorevic said.
The new company, which will be called Teladoc Health and will be headquartered in Purchase, New York, and will have expected 2020 pro forma revenue of about $1.3 billion.
U.S. President Donald Trump on Monday signed an executive order expanding access to telehealth services for 57 million Americans in under-served rural areas and elsewhere, after virtual visits soared during the coronavirus pandemic.