Teladoc to buy Catapult Health for $65 million

PURCHASE, NY - Teladoc Health (NYSE:TDOC), a prominent player in virtual healthcare with a market capitalization of $1.8 billion, has reached a definitive agreement to acquire Catapult Health, known for its virtual preventive care services. The $65 million all-cash transaction, with an additional potential $5 million earnout, is expected to close in the first quarter of 2025, subject to standard closing conditions. According to InvestingPro data, Teladoc currently trades below its Fair Value, suggesting potential upside for investors interested in the virtual healthcare sector.

The acquisition aims to enhance Teladoc Health’s integrated care segment by incorporating Catapult Health’s patient-centric diagnostic testing and clinical support model. This move is expected to bolster Teladoc’s strategy of expanding membership, deepening healthcare outcomes, growing internationally, and advancing its position in scaled mental health. With annual revenue of $2.6 billion and a strong gross profit margin of 71%, Teladoc demonstrates significant operational scale. InvestingPro subscribers can access detailed analysis and additional insights through the comprehensive Pro Research Report, available for over 1,400 US stocks.

Catapult Health’s VirtualCheckup, an at-home wellness exam, is a central element of this acquisition. It enables members to perform health screenings and discuss results with a nurse practitioner, leading to a personalized health action plan. With a strong Net Promoter Score of over 81, Catapult Health has demonstrated its ability to detect health risks early, with notable cost savings for its customers.

Teladoc Health’s CEO, Chuck Divita, expressed enthusiasm about integrating Catapult Health’s team and innovation culture. The acquisition is anticipated to provide Teladoc’s members with more accessible wellness and preventative care, while delivering better health outcomes in care management. Catapult Health’s capabilities are also set to enhance Teladoc Health’s chronic disease management programs and mental health services.

Catapult Health’s CEO, David Michel, highlighted the opportunity to accelerate their impact through the acquisition, aligning with the shared mission of promoting healthier lives. Catapult Health’s trailing twelve-month revenue was approximately $30 million as of the third quarter of 2024.

Teladoc Health, which serves over 93 million members, continues to lead the virtual care industry, focusing on personalized interventions and data-driven insights to improve health outcomes. While the company has seen a 37% price increase over the past six months, InvestingPro analysis indicates strong free cash flow yield potential, despite current profitability challenges. This acquisition is a strategic step in Teladoc Health’s ongoing efforts to transform healthcare experiences and expand its suite of services. The information for this article is based on a press release statement and InvestingPro data.

In other recent news, Teladoc Health has been making significant strides in various sectors. The company has announced a partnership with Amazon (NASDAQ:AMZN) to enhance access to its chronic condition programs through Amazon’s Health Benefits Connector. This collaboration aims to streamline the enrollment process for Teladoc Health’s diabetes, hypertension, pre-diabetes, and weight management programs, making them more accessible to Amazon customers.

In analyst news, Piper Sandler maintained an Overweight rating on Teladoc Health, raising the price target to $13 from the previous $11. This decision follows a Fireside Chat with Teladoc’s CEO and CFO, with Piper Sandler expressing confidence in the company’s outlook. Similarly, Goldman Sachs initiated coverage on Teladoc Health, assigning a Buy rating and a price target of $14.00, based on a positive outlook for the company’s integrated care business.

Teladoc Health has also introduced new artificial intelligence (AI) enhancements to its Virtual Sitter offering, aimed at increasing patient safety and improving care in hospitals and health systems. The AI-enabled Virtual Sitter allows for remote monitoring staff to oversee more patients simultaneously, potentially reducing the incidence of patient falls in hospitals. These are some of the recent developments in Teladoc Health’s pursuit to enhance healthcare experiences and outcomes.

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