Teladoc Health has signed a definitive agreement to acquire virtual preventive care company Catapult Health to bolster the early detection of health conditions and expand into at-home diagnostic testing.
The two virtual-first companies reached a deal for $65 million, with an additional $5 million in additional contingent earnout consideration. Catapult will become a wholly owned subsidiary of Teladoc. Catapult’s trailing 12-month revenue was $30 million as of the third quarter of 2024, according to the companies.
The deal is expected to close in the first quarter of 2025, subject to customary closing conditions.
Catapult Health was founded 15 years ago, first as an on-site preventive health checkup solution for workers. The company took its services remote in 2020 after the onset of the COVID-19 pandemic.
Since 2020, Catapult Health has been providing at-home diagnostics kit to patients so they can collect a blood sample, check blood pressure and other health screening information.
The company pairs the kit with a telehealth visit with a nurse practitioner to create a personalized health action plan. Teladoc claims that 30% of Catapult’s members have discovered high blood pressure and 28% learned they have prediabetes for the first time.
Catapult has hundreds of employer customers and offers its services to more than 3 million covered lives, according to Teladoc. An independent analysis by a third-party health plan found that the Catapult Health VirtualCheckup solution delivers more than $1,400 of cost savings over a three-year period.
Now, Catapult patients will be funneled into Teladoc’s chronic condition management programs for diabetes, hypertension, prediabetes and weight management programs if their at-home screenings indicate they are qualified. Catapult Health’s clinicians will be able to directly enroll qualifying patients into Teladoc’s programs and easily refer them to Teladoc’s primary care and mental health clinicians, according to a press release.
Teladoc now has 93 million members with access to one or more of its services and has 10,000 customers, CEO Chuck Divita said during a presentation to investors at the J.P. Morgan Healthcare Conference in San Francisco last month.
The acquisition marks yet another way Teladoc is trying to attract customers. At JPM, Teladoc announced it joined Amazon’s health benefits program. The tie-up with Amazon offers an “exciting avenue” to find new ways for access to the company’s chronic care programs, Chief Financial Officer Mala Murthy said at the event.
Teladoc is now one of five virtual care companies linked with Amazon Health Services’ benefit connector service along with Omada Health, Rula Health, Hinge Health and Talkspace.
The company has more than 1 million active enrollees across its chronic condition programs, which leverage connected devices, data-driven personalization and expert coaching to support sustainable behavior change and improved cardiometabolic health.
Murthy called 2025 an “important repositioning year” for Teladoc in the company’s third-quarter 2024 earnings call.
“Actions we are taking to position the company for long-term success will require incremental investments as we build out various products and capabilities. These will help enhance our value proposition and more effectively support client objectives as we adapt to evolving market demand and pricing dynamics in the core virtual care business. We expect these investments to ultimately unlock growth opportunities into the future and position the company to deliver sustainable, improved performance,” Murthy told investors during the earnings call.
The company faces pressure in a saturated telehealth market but sees opportunities to grow by providing services to health plans, health systems, employers and consumers.
For the first nine months of 2024, Teladoc has brought in 1% less revenue than last year, at $1.9 billion. And, the company logged a net loss of $953 million for the first nine months of 2024, compared to $191 million during the same period in 2023.
Teladoc plans to leverage Catapult’s technology to enhance its existing products. For example, Teladoc will provide lab-confirmed A1c results to health plans so they can determine population enrollment, the company said.
“Catapult Health’s capabilities will help advance our strategy in meaningful ways—from giving more members access to convenient and impactful wellness and preventative care, to unlocking greater value for our customers,” Divita said in a statement. “Catapult Health brings an experienced team and a strong culture of innovation, and we are thrilled to welcome them to Teladoc Health.”
Publisher: Source link
