Business

At the back of the most important virtual well being deal to this point

Good afternoon, readers.

As I mentioned last week, we’re back to a weekly for the Capsule. So look for this every Thursday in your inbox.

Livongo and Teladoc announced an $18.5 billion merger on Wednesday, the largest deal ever in the digital health space, per the companies. I’ve had the pleasure of speaking with Jennifer Schneider, Livongo’s president, several times—and she shared some details with me earlier this week about what led to the deal.

I’ll have more to say on that later. But I’ll leave readers with a small taste.

Livongo and Teladoc are both digital health companies, and the former is focused on providing real-time services for patients with chronic conditions such as diabetes. The deal is structured as a cash and stock merger. But these virtual medical companies have a different set of expertise which Schneider says can enhance each other (to use corporate speak, synergies).

Among these synergies is merging data collection with virtual care delivery. Those kinds of expertise have a logical relationship.

And, as with just about everything in health care right now, the coronavirus pandemic fueled this particular deal, according to Schneider.

“I think the acceleration of the market, the acceptance of the business models driven by incredible user experience for telemedicine in the pandemic, is a driving force,” she says.

“And it’s also driving the acceptance that this is not a blip. This is not a smaller portion of the health care delivery system. And that’s a large component which has really sped up the approach and the desire to get to that end vision, which is shared between Teladoc and Livongo.”

Stay tuned for more, read on for the day’s news, and see you next week.

Sy Mukherjee
sayak.mukherjee@fortune.com
@the_sy_guy


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