Teladoc to acquire medical consultation firm Best Doctors for $440M
- Teladoc that it has signed a definitive agreement to acquire Best Doctors, a Boston-based medical consultation firm for $440 million.
- The acquisition will add Best Doctor’s network of 50,000 specialists to Teladoc’s 3,100 physicians and therapists. It also brings analytics, cognitive computing and patient-centric capabilities to support Teladoc’s telehealth platform.
- Under the deal, Teladoc will pay $375 million in cash plus $65 million in common stock. The transaction is set to close in July, pending regulatory approvals.
The deal will give Teladoc a global footprint. Following the acquisition, Best Doctors CEO Peter McClennan will continue to lead Best Doctors as president of the new Teladoc division.
Best Doctors generated $92.2 million in revenue in 2016 and pulled in $23.7 million in the first three months of 2017, putting the company on track for $100 million in revenue this year, according to a prepared statement. Still, the company experienced a net loss of $5.6 million last year via operations after pulling in $92.2 million, Xconomy reported.
Purchase, N.Y.-based Teladoc beat expectations for the 2017 first quarter with a 60% jump in revenue to $42.9 million, compared with last year and a net loss of $15.65 million. The company also reported increases in revenue from subscription access fees, visit fees, total membership and total visits.
Interest in telemedicine is ramping up as providers look to increase patient monitoring and improve population health while reducing costs. But the surge in telehealth services has created a need for guidance and regulation. A multi-sector group is currently working n developing evidence-based clinical guidelines for providers and hospitals.
The guidelines should encourage cooperation among organizations, Dr. Judd Hollander, an associate dean at Thomas Jefferson University has led telehealth initiatives, told Healthcare Dive recently. “We don’t need different guidelines for telemedicine. We need to achieve the goals in a different way,” he said.
In an earnings call last month, Teladoc CEO Jason Gorevic said the company is working on offering new specialty products in behavioral health and dermatology. He also announced new agreements with two multi-hospital health systems and an expanded agreement with Mount Sinai Health System. The company’s services are already used by more than 140 hospitals.