3 Firms Guide $18.5B Teladoc Health-Livongo Deal

By Benjamin Horney
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Law360 (August 5, 2020, 9:31 AM EDT) -- Teladoc Health and privately held chronic health condition management platform Livongo said Wednesday that they have agreed to merge in an $18.5 billion transaction that was put together with help from Paul Weiss, Skadden and WilmerHale.

The deal stands to create a giant in the virtual personalized health care space, with telehealth having become especially popular in the wake of the coronavirus pandemic, according to a statement. The merged entity anticipates posting 2020 pro forma revenue of about $1.3 billion and adjusted earnings before interest, taxes, depreciation and amortization of $120 million.

"This merger firmly establishes Teladoc Health at the forefront of the next-generation of health care," said Jason Gorevic, CEO of Teladoc Health. "Livongo is a world-class innovator we deeply admire and has demonstrated success improving the lives of people living with chronic conditions. Together, we will further transform the health care experience from preventive care to the most complex cases, bringing 'whole person' health to consumers and greater value to our clients and shareholders as a result."

Under the terms of the cash and stock transaction, Purchase, New York-based Teladoc Health will acquire Mountain View, California-headquartered Livongo, with each Livongo share being exchanged for 0.5920 shares of Teladoc Health plus $11.33 in cash. When the deal is completed, existing Teladoc Health shareholders will own about 58% of the combined company, with Livongo shareholders owning roughly 42%. The combined company will be called Teladoc Health and be headquartered in Purchase, New York.

Glen Tullman, founder and executive chairman of Livongo, said in the press release that "this highly strategic combination will create the leader in consumer-centered virtual care and provides a unique opportunity to further accelerate the growth of our data-driven member platform and experience."

"By expanding the reach of Livongo's pioneering Applied Health Signals platform and building on Teladoc Health's end-to-end virtual care platform, we'll empower more people to live better and healthier lives," Tullman added.

The agreement is subject to approval from regulators and shareholders of both sides, in addition to other customary conditions. The companies expect to complete the deal by the end of the fourth quarter of this year.

Paul Weiss Rifkind Wharton & Garrison LLP served as legal adviser to Teladoc Health, with Lazard acting as exclusive financial adviser.

The Paul Weiss team includes partners Scott A. Barshay and Laura C. Turano, plus associate Hayoon Kim.

Skadden Arps Slate Meagher & Flom LLP served as legal adviser to Livongo, with Morgan Stanley acting as exclusive financial adviser.

The Skadden team includes M&A partners Mike Ringler and Sonia Nijjar and associate Peter Jones; tax partner Nathan  Giesselman; executive compensation and benefits partner Joseph Yaffe and counsel Kristin Davis; intellectual property and technology partner Ken Kumayama; labor and employment partner Karen Corman; antitrust partner Maria Raptis; banking partner Kristine Dunn; capital markets partner Michelle Gasaway and counsel Michael Ena; and litigation partner Maya Florence and counsel Avia Dunn. 

WilmerHale is representing General Catalyst, the largest shareholder of Livongo. The WilmerHale team includes Jason Kropp, Hal Leibowitz, Andrew Bonnes and Molly Fox.

Gibson Dunn & Crutcher LLP advised Lazard as financial adviser to Teladoc Health, with a corporate team that includes partner Barbara Becker and associates Andrew Kaplan and Elizabeth Romefelt.

--Editing by Katherine Rautenberg.

Update: This story has been updated with additional counsel information.

For a reprint of this article, please contact reprints@law360.com.

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