DarioHealth Corp. announced on February 21 that it acquired Twill, Inc., formerly known as Happify Health.
Under the terms of the Twill acquisition, Dario paid $10 million in cash and agreed to issue approximately 10 million shares of common stock in the form of pre-funded warrants for the benefit of Twill’s debt holders and equity holders. The warrants will vest in four equal amounts at 270 days, 360 days, 540 days and 720 days, post deal closing.
Twill is a global software-enabled healthcare platform that provides digital therapeutics and care delivery models focusing on mental and physical health. It partners with enterprises, pharma companies and health plans to create new products to help support and manage specific mental and physical conditions. It was founded in 2012 and is based in New York, New York.
DarioHealth is a leading global digital therapeutics company that helps people with chronic conditions manage their health. The company provides adaptive, personalized experiences that drive behavior change through evidence-based interventions, digital tools, software and coaching to help individuals improve health and sustain meaningful outcomes. According to its full year financial report, DarioHealth generated more than $27.6 million in revenue, and EBITDA of -$56 million.
The acquisition of Twill is expected to nearly double pro forma 2023 revenue, and gross margins are expected to reach approximately 80-85% by 2025. This is based on extrapolated, pro forma revenues through the nine months ended September 30, 2023, of $30.5 million, comprised of $16.7 million in Dario revenues and $13.8 million in Twill revenues, or $18.4 million annualized.
Stifel acted as financial advisor to DarioHealth, and Sullivan & Worcester LLP acted as legal counsel to DarioHealth in connection with the acquisition and the financing. TD Cowen acted as financial advisor and Lowenstein Sandler LLP acted as legal counsel to Twill.
Concurrent with the acquisition, Dario priced a $22.4 million private placement of convertible preferred stock, which it intends to use the net proceeds of for general corporate purposes.
According to data captured in the LevinPro HC database, this transaction represents the 43rd eHealth acquisition of 2024, and the sixth in the patient engagement specialty. During 2023, there were 273 eHealth and 17 patient engagement transactions announced.
