Telehealth supplier MDLive is being acquired by Cigna’s well being providers subsidiary Evernorth, the 2 firms introduced this morning.
The deal is anticipated to shut someday in Q2. The phrases of the deal weren’t disclosed, though Cigna mentioned that it will share extra info relating to the acquisition throughout its Investor Day occasion scheduled for March 8.
WHY IT MATTERS
MDLive is among the many largest telehealth distributors within the U.S., and delivers providers together with pressing care, dermatology, remedy and psychiatry through its community of licensed clinicians. Through the years, it is marketed its 24/7 digital care providers on to customers, whereas additionally partnering with well being programs, employers and payers (together with Cigna) to both prolong hospital care or present digital care as a member profit.
As of a $50 million fairness funding (plus $25 million debt financing) introduced in September, the telehealth firm mentioned that its digital visits had practically doubled in the course of the first half of 2020. As its complete bookings grew greater than 300%, the corporate additionally highlighted substantial quantity development amongst particular person areas resembling behavioral well being (greater than 500% year-over-year go to development) and dermatology (350% year-over-year go to development) by way of July.
Analysts pegged the corporate’s valuation at greater than $1 billion as of that funding. Roughly across the similar time, the corporate’s management was additionally floating the thought of going public within the opening months of 2021.
These plans now seem to have been nixed in favor of the M&A, a transfer that Cigna’s Evernorth hopes will type the spine of an end-to-end digital care providing for its clients. COVID-19 has elevated clients’ urge for food for digital choices, Evernorth CEO Tim Wentworth mentioned in a press release.
By integrating MDLive’s digital platform, Evernorth believes it will possibly construct a related care supply mannequin that not solely is extra handy, however might extra shortly determine sufferers’ wants, extra simply facilitate specialist or behavioral well being referrals, and broadly scale back prices.
“With the chance to serve thousands and thousands extra individuals, and with extra personalised methods to ship care, we could have a fair larger affect on our clients, shoppers and companions,” Wentworth mentioned in a press release.
“Combining MDLive’s platform and powerful community for digital suppliers with our complete care options, we will probably be higher positioned to optimize the care journey to enhance affordability and accessibility, and to ship superior assist to well being plans as they advance their very own care supply fashions for the longer term.”
For MDLive, the exit can be a possibility to increase its enterprise. Charles Jones, chairman and CEO of MDLive, mentioned in a press release that the deal would assist MDLive because it develops and deploys new providers for its goal markets. Additional, the deal opens up entry to Evernorth and Cigna’s U.S. shoppers as new alternatives for development.
“Changing into a part of the Evernorth portfolio is a chance for MDLive to affix a company that enhances our work, and has been a longtime companion and investor in our enterprise,” Charles Jones, chairman and CEO of MDLive, mentioned in a press release.
“With this transaction, Evernorth will achieve an industry-leading platform, and a passionate and pioneering workforce that made digital care a actuality, and an important and lifesaving service in the course of the COVID-19 pandemic.”
THE LARGER TREND
Based in 2009, MDLive had collected quite a lot of funding rounds through the years for a lifetime increase simply shy of $200 million, in accordance with CrunchBase. Cigna has stood among the many ranks of its buyers for a while, notably gaining a place among the many telehealth firm’s advisors as a part of a 2018 spherical.
As we speak’s deal stands as the newest instance of main payers opening their checkbooks to convey related healthcare providers below their wing. Take Cigna rival UnitedHealth Group, It reportedly bought digital pharmacy DivvyDose in September, whereas its Optum healthcare providers enterprise bought digital behavioral care firm AbleTo and post-acute care administration platform naviHealth in April.
It is little shock that payers like Cigna are additionally viewing telehealth in a brand new gentle post-COVID-19. Teladoc Well being, the general public market’s go-to digital care supplier, just lately outlined a yr of knockout development in its quarterly earnings name.
Physician On Demand, one other main telehealth supplier, sang a lot the identical tune when asserting a $75 million Collection D over the summer time, whereas client telehealth manufacturers like Hims & Hers (and supposedly Ro) have regarded to leverage their momentum on the general public markets.