Telehealth giant Teladoc Health on Sunday said it plans to purchase InTouch Health, a telehealth company that serves the provider market, for $600 million.
Teladoc officials said the acquisition of InTouch Health, which works with more than 450 hospitals and health systems, will better position the company in the provider market. Through the acquisition, Teladoc plans to create a virtual-care solution that spans provider-to-provider telehealth capabilities for inpatient care, as well as consumer-to-provider applications for outside the hospital.
Offering a single enterprise telehealth solution opens up a noteworthy market opportunity for Teladoc, the company believes, citing research conducted by JPMorgan last year that found 40% of hospitals are planning to increase their budgets for telehealth.
"Today marks a bold leap forward in Teladoc Health's mission to transform how high-quality healthcare is accessed and experienced, making virtual care available for patients with even the most critical care needs," Teladoc CEO Jason Gorevic said in a statement Sunday. With the acquisition of InTouch Health, Teladoc's services will include critical, chronic and everyday care.
InTouch Health is expected to generate $80 million in 2019 revenue, according to a news release from the companies. Teladoc in October pegged its revenue guidance for 2019 to be in the range of $546 million to $550 million.
Teladoc officials expect to complete the $600 million acquisition by the end of the second quarter of 2020. The $600 million figure includes roughly $150 million in cash and $450 million in Teladoc common stock.
Teladoc has spent millions on acquisitions in recent years, reflecting consolidation that's affecting all of healthcare, including the telehealth sector.
Last year Teladoc acquired MédecinDirect, a Paris-based telehealth provider that now serves as Teladoc's unit in France, for an undisclosed sum. In 2018, the company completed its purchase of Advance Medical, a virtual-care provider with a footprint in Europe, Asia and Latin America, for $352 million. One year prior, in 2017, Teladoc spent $440 million to acquire Best Doctors, a medical consultation company focused on complex medical issues.