Teladoc Health to accumulate Catapult Health in $65 million deal

Teladoc Health shares climbed 6% Wednesday after the corporate announced it’ll acquire preventative care company Catapult Health in an all-cash deal for $65 million.

Catapult offers an at-home wellness exam that enables members to ascertain their blood pressure, collect a blood sample, log other screening information and meet virtually with a nurse practitioner. Teladoc, a virtual care platform, said the acquisition will help it improve its ability to detect health conditions early.

The corporate said Catapult will operate inside its integrated care segment after the deal closes. At JPMorgan’s health-care conference in January, Teladoc said it’s actively working to grow membership and use of services inside its integrated care segment.

“Catapult Health’s capabilities will help advance our strategy in meaningful ways — from giving more members access to convenient and impactful wellness and preventative care, to unlocking greater value for our customers,” Teladoc CEO Chuck Divita said in an announcement.

Catapult generated around $30 million in trailing twelve-month revenue as of the third quarter of 2024, Teladoc said. Catapult covers around 3 million people while Teladoc touts greater than 93 million members.

“Joining forces with Teladoc Health will help us speed up our impact and advance our shared mission to empower healthier lives,” Catapult CEO David Michel said in an announcement.

The deal is anticipated to shut in the primary quarter of this 12 months.

Teladoc’s acquisition of Catapult comes after a tumultuous period for the corporate. When Teladoc acquired Livongo in 2020, the businesses had a combined enterprise value of $37 billion. The stock has tumbled since then, and Teladoc’s market cap now sits under $2 billion.

In April, Teladoc announced the sudden departure of Jason Gorevic, who joined as CEO in 2009 and steered the corporate through the Livongo deal and the Covid-19 pandemic. Divita took over as chief executive in June and pledged to position the corporate for “long-term, sustainable success.”

The Catapult deal is also a bellwether for more consolidation throughout the battered digital health sector, as firms have had to regulate to a more muted growth environment and deal with profitability. In January, digital health startup Transcarent, whose CEO Glen Tullman founded Livongo, announced plans to take Accolade private in a deal valued at roughly $621 million.