Telehealth provider MDLive is being acquired by Cigna's health services subsidiary Evernorth, the two companies announced this morning.
The deal is expected to close sometime in Q2. The terms of the deal were not disclosed, although Cigna said that it would share additional information regarding the acquisition during its Investor Day event scheduled for March 8.
WHY IT MATTERS
MDLive is among the largest telehealth vendors in the U.S., and delivers services including urgent care, dermatology, therapy and psychiatry via its network of certified clinicians. Over the years, it's marketed its 24/7 virtual care services directly to consumers, while also partnering with health systems, employers and payers (including Cigna) to either extend hospital care or provide virtual care as a member benefit.
As of a $50 million equity investment (plus $25 million debt financing) announced in September, the telehealth company said that its virtual visits had nearly doubled during the first half of 2020. As its total bookings grew more than 300%, the company also highlighted substantial volume growth among individual areas such as behavioral health (more than 500% year-over-year visit growth) and dermatology (350% year-over-year visit growth) through July.
Analysts pegged the company's valuation at more than $1 billion as of that funding. Roughly around the same time, the company's leadership was also floating the idea of going public in the opening months of 2021.
Those plans now appear to have been nixed in favor of the M&A, a move that Cigna's Evernorth hopes will form the backbone of an end-to-end virtual care offering for its customers. COVID-19 has increased customers' appetite for virtual offerings, Evernorth CEO Tim Wentworth said in a statement.
By integrating MDLive's virtual platform, Evernorth believes it can build a connected care delivery model that not only is more convenient, but could more quickly identify patients' needs, more easily facilitate specialist or behavioral health referrals, and broadly reduce costs.
"With the opportunity to serve millions more people, and with more personalized ways to deliver care, we will have an even greater impact on our customers, clients and partners," Wentworth said in a statement.
"Combining MDLive's platform and strong network for virtual providers with our comprehensive care solutions, we will be better positioned to optimize the care journey to improve affordability and accessibility, and to deliver superior support to health plans as they advance their own care delivery models for the future."