Expanding Teladoc Adds Network, Tech With $440M Best Doctors Deal
Dallas—In Teladoc’s acquisition of Boston-based Best Doctors—a $440 million cash-and-stock deal that the companies announced Monday—Teladoc (NYSE: TDOC) is gaining a business that lets it offer more specialization in its telemedicine services.
Best Doctors connects individuals who have tough decisions to make about treatments—or who want a second opinion about a diagnosis—with top-rated doctors worldwide. That fits well with Teladoc’s more general telemedicine offerings, such as treating medical conditions like cuts and rashes or behavioral health conditions. Both companies sell services to businesses and other large organizations.
The acquisition of Best Doctors is also bringing Teladoc a company that has developed its own analytics and cognitive computing programs. Artificial intelligence is an area of technology that Teladoc CEO Jason Gorevic told Xconomy last month is the next frontier of telemedicine.
Best Doctors, which was founded in 1989 by Harvard Medical School physicians, has a global network of 50,000 doctors on its platform, and Teladoc says the acquisition will push the merged company to expand globally. Teladoc, which has corporate offices in Lewisville, TX, and Purchase, NY, has been expanding in U.S. states such as Texas, which last month adopted a law that made operating in the Lone Star State easier. Teladoc expects to host about 1.5 million telehealth conversations this year for the approximately 20 million people it considers members. It considers 7,500 payers, providers, and employers as clients.
The deal gives Teladoc a presence in Boston, which is home to many healthcare institutions, as well as a major competitor in telemedicine, American Well. The companies have been involved in a patent dispute in recent years.
For Best Doctors, Teladoc is paying $375 million in cash and $65 million in stock. Best Doctors reported revenue of $92.2 million in 2016, though its operations resulted in a $5.6 million net loss that year, according to Teladoc. The company had $6.5 million of earnings before interest, taxes, depreciation, and amortization.