Telemedicine provider Teladoc to spend $18.5B on Livongo

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One of the nation’s biggest telemedicine providers will spend more than $18 billion to stoke an approach to care that grew explosively during the pandemic and recently received an endorsement from President Donald Trump.

Teladoc Health Inc. plans to dive deep into managing the health of patients with diabetes and high blood pressure with a cash-and-stock deal for Livongo Health that’s expected to close later this year.

Telemedicine involves the remote care of patients, often through a live video connection. Millions of patients were forced to try it for everything from routine care to checkups with specialists after COVID-19 shut down much of the economy earlier this year.

Teladoc said late last month that its total visits tripled in the recently completed second quarter to 2.8 million, and revenue grew 85%. The company also said it expects gains to spill over into 2021, when it projects revenue growth of between 30% and 40%.

Telemedicine has been around for years, and a growing number of employers have offered it to their workers as a way to save money and improve their access to care.

The practice was relatively slow to catch on with many patients before COVID-19, but now there’s growing momentum to keep telemedicine’s gains after the pandemic finally fades.

The Trump administration announced on Monday that it was taking steps to give telehealth a broader role under Medicare.

Health care researchers also say they expect telemedicine to play a greater role in health care once the pandemic finally fades in part because people have become more used to the practice, and they may be more wary now of sitting in waiting rooms filled with other sick patients.

Doctors also see a greater role for the practice in monitoring people with chronic conditions like hypertension or diabetes. That’s the speciality of Mountain View, California-based Livongo Health Inc.

The companies said Wednesday that their boards have unanimously approved their deal.

Once complete, Teladoc Health Inc. CEO Jason Gorevic will run the combined company, and Teladoc shareholders will own a 58% stake.

Teladoc shares slipped 5% to $237 before markets opened Wednesday, while Livongo Health Inc.'s stock jumped 9% to $153.65.