Virtual care provider Teladoc Health will acquire chronic condition management app vendor Livongo in a deal that values the company $18.5 billion, the companies announced this morning.
The announcement characterized the transaction as a merger, but the deal is structured as an acquisition. The combined companies will operate under the Teladoc name, Teladoc CEO Jason Gorevic will continue in that role, and Teladoc’s board chair will also remain in that role.
The share price of both companies dropped sharply midday Wednesday following the announcement. Both have seen their shares run up by multiples so far in 2020.
The companies expect their combined revenue to reach $1.3 billion in 2020. Teladoc just reported Q2 revenue of $241 million, up 85% as virtual visits increased by 203%.
Neither company has ever booked a quarterly profit. Teladoc went public in 2015, Livongo in 2019.