Telehealth companies have proliferated rapidly in recent years, and so have mergers and acquisitions targeting them. In the first half of 2017, 11 deals have been made public for U.S. companies or physician groups specializing in telehealth, compared with 13 deals announced in all of 2016. The latest deal from Teladoc (NYSE: TDOC) adds a global component to its roster.
On June 19, Teladoc announced the acquisition of Best Doctors, Inc., backed by Brown Brothers Harriman & Co. Best Doctors is a medical consultation company with a global network of more than 50,000 medical experts. These experts are peer-rated in a Gallup-certified poll as being in the top 5% of physicians in more than 450 specialties.
The purchase price of $440 million consists of $375 million cash and $65 million of TDOC common stock. Teladoc secured committed financing from Jefferies Finance LLC and Jefferies Group LLC for $360 million which, combined with the company’s cash on hand, will fund the cash portion of the deal.
The multiples work out to nearly 4.8x revenue and 67.7x EBITDA.
The newly combined company offers a highly differentiated suite of virtual care delivery options for a broad range of market segments, spanning the spectrum of employers to health plans and health systems.
Teledoc will now develop and deploy global expansion plans, meeting a spectrum of care needs outside the U.S. This transaction is expected to close in July 2017 subject to regulatory approvals and customary closing conditions.
