交易之前，两个公司的估值分别是今年销售收入的20倍和50倍。均亏损。市值分别为180亿美元和130亿美元。

Virtual care group Teladoc to buy rival Livongo for $18.5bn.

   ft.com 2020-8-6,

Companies aim to capitalise on boom in demand for tele-health services during coronavirus pandemic. Teladoc Health, a virtual care company, has agreed to buy rival Livongo in a $18.5bn cash-and-stock deal as together they seek to create a telemedicine giant to capitalise on a boom in demand for remote healthcare services during the coronavirus pandemic.

Under the terms of the agreement, Livongo’s shareholders will receive 0.5920 shares of Teladoc plus $11.33 in cash for each of their shares. Once the merger is complete, Teladoc shareholders will own about 58 per cent of the combined company with the rest to Livongo.

Coronavirus has kept patients away from hospitals and doctor’s clinics for fear of infection, helping telemedicine come of age in 2020. That trend is expected to continue as uncertainty remains about when the pandemic will end. “Covid-19 has caused a massive acceleration in the use of tele-health,” McKinsey said in a May report. “Consumer adoption has skyrocketed, from 11 per cent of US consumers using tele-health in 2019 to 46 per cent of consumers now using tele-health to replace cancelled healthcare visits.”

The valuations of telemedicine companies have also soared. Shares in Teladoc have risen 200 per cent since the start of the year, while Livongo’s stock rose has gained 500 per cent during the same period.

“This highly strategic combination will create the leader in consumer-centred virtual care and provides a unique opportunity to further accelerate the growth of our data-driven member platform and experience,” said Glen Tullman, Livongo’s founder and executive chairman.

The combined company is expected to reach 70m customers in the US. The new platform is set to generate revenues of about $1.3bn in 2020 on a pro-rata basis, representing year-on-year growth of 85 per cent. It is expected to generate pro rata earnings before interest, taxes, depreciation and amortisation of more than $120m for 2020, and revenue synergies of $100m by the end of the second year, increasing up to $500m by 2025.

“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,” said Jason Gorevic, Teladoc Health’s chief executive.

At $18.5bn, Teladoc’s offer values Livongo at 55 times 2020 revenue. Teladoc itself is only trading at 20 times forward sales. Taxed and capitalised, the $60m in cost savings projected by Teladoc works out to about $450m, which will only cover a third of the premium it is paying for Livongo.

McKinsey reckons up to $250bn of current US healthcare expenditure could pay for virtual care.

The risk for operators like Teladoc is that hospital groups employ their own medical professionals to roll out similar services. Even Amazon has joined the fray. The e-commerce giant last year announced the start of an online primary care clinic for its workers in the Seattle area. In a field littered with companies that have over-promised and under-delivered, Teladoc will struggle to prove it is different.