Teladoc’s $18.5B Livongo acquisition closes in just under 3 months

Teladoc has already secured an $ 18.5 billion acquisition of Livongo after the acquisition of its owners, a sponsor of the project announced Friday.

As part of the merger, Livongo shareholders will receive 0.5920 times Teladoc’s share plus $ 11.33 in cash for each Livongo share. Teladoc shareholders will own approximately 58% of the combined company and Livongo shareholders approximately 42%. Livongo shares were no longer trading prior to Friday’s open.

• In a meeting Thursday, shareholders of virtual care giant Teladoc and chronic care manager Livongo approved the company’s massive $ 18.5 billion mergers, based on preliminary vote results.

• At a special meeting held on Thursday morning, Teladoc shareholders approved the modification of Teladoc’s bylaws and the issuance of shares in connection with the Livongo acquisition with an approval rate higher than 99%. In a separate meeting, Livongo shareholders approved the merger, even with more than 99% of the vote, Teladoc said in a statement Thursday.

• Teladoc, which released its third-quarter results on Wednesday, now expects the acquisition to close on Friday, according to an SEC document. The timing of the agreement was relatively quick, especially for healthcare. The deal is expected to be less than three months after its announcement, as businesses are likely to benefit from the favorable winds of COVID-19 and Health Digital on Wall Street.

Thursday’s preliminary approval was not a surprise, although Teladoc and Livongo have yet to present the final results of the vote to the SEC.

According to the executives of the two companies, the goal of the merger is to provide a complete virtual assistance offering with a wide range of services through a single point of contact. According to analysts, the combined company may be more attractive to potential payers and employers than other competitors.

The new company expects combined revenue of $ 1.3 billion in 2020, an estimated 85% annual growth, and expects 30% to 40% revenue growth over the next two to three years.

Upon completion of the merger, many of Livongo’s top executives, including Chief Executive Officer Zane Burke and President Jennifer Schneider, will leave the company along with Livongo’s Chief Financial Officer and Vice President of Business Development.

The board of directors of the merged company will consist of eight directors from Teladoc, including CEO Jason Gorevic, and five from Livongo, including founder Glen Tullman.

Teladoc also released its third-quarter results on Wednesday. The New York-based purchasing provider posted revenue of $ 288.8 million for the quarter, nearly 110% more than the third quarter of 2019. The total number of visits for the quarterly rate was $ 2.84 million, more than three times the same previous period a year and slightly sequential.

However, Teladoc reported a loss of $ 35.9 million for the quarter. Approximately $ 16 million of that loss was due to transaction costs related to the Livongo acquisition.