Deal value: $18.5 billion
Announced: August 5, 2020
Closed: October 30, 2020
To start by saying the COVID-19 pandemic has changed the world would be a serious understatement. And while many have their eyes on returning to the way things were—as vaccines begin to roll out across the globe—Teladoc Health believes the changes in how we interact with our doctors are here to stay, and it’s investing $18.5 billion to make sure of it.
The telemedicine giant’s deal for Livongo, with its digital health programs for chronic conditions, reflects how the coronavirus and social distancing have quickly accelerated the timeline for the adoption of virtual visits.
A field that was expected to grow steadily over the next three to five years has leapt forward in a matter of months, with nearly 80% of U.S. specialists saying they have begun to use telehealth to reach more patients in the past year, according to a survey from GlobalData.
That demand, in no small part, helped fuel one of the largest medtech acquisitions of 2020, and one that was quickly finalized less than three months later.
By combining Teladoc’s established services—and its base of 70 million customers—with Livongo’s offerings in preventive medicine and chronic disease management in diabetes, high blood pressure and behavioral health, the two companies aim to provide personalized care and lifestyle recommendations on a large scale.
They also hope to see a combined revenue of $1.1 billion for 2020—double the $553 million Teladoc collected in 2019, pre-pandemic—with cost cuts totaling $100 million in the coming two years, and $500 million by 2025.
And since the deal’s close in October, Teladoc has picked up the torch from Livongo’s partnership with the continuous glucose monitoring company Dexcom. Teladoc recently announced it would launch a pilot demonstration of Dexcom’s wearables in patients with Type 2 diabetes and connect their data with Livongo’s coaching programs, as both companies look to move deeper into a long-term care market relatively untapped by digital tools.