Many predicted increased M&A activity in the digital health space in 2025, and so far they seem to be right. On Wednesday, telemedicine company Teladoc Health announced that it plans to acquire virtual preventive care company Catapult Health in an all-cash transaction for $65 million.
Purchase, New York-based Teladoc Health, which went public in 2015, offers support for mental health, weight management, diabetes, hypertension and primary care. Catapult Health, based in Dallas, has an at-home wellness exam called VirtualCheckup, in which patients collect a blood sample, check blood pressure and provide other health information. They then have a virtual visit with a nurse practitioner to go over results and create a personalized health plan.
Through the acquisition, which is expected to close in the first quarter of 2025, Catapult clinicians can enroll those who need support into Teladoc Health’s diabetes, hypertension, pre-diabetes and weight management programs. They can also refer patients to Teladoc Health’s mental health therapists and primary care physicians.
“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,” said Chuck Divita, CEO of Teladoc Health, in a statement.
Catapult Health will operate as a separate unit within the Integrated Care segment of Teladoc Health. Its CEO, David Michel, will continue to lead Catapult, a Teladoc spokesperson told MedCity News.
The acquisition comes after a challenging period for Teladoc Health. In 2020, Teladoc and Livongo went through an $18.5 billion merger, but the combined entity has largely struggled since then. In April, its longtime CEO Jason Gorevic left the company, and Divita took over in June. The company’s stock is currently trading at a little over $11 per share, compared to about $293 in February 2021.
However, this acquisition may help Teladoc Health turn things around, according to Kate Festle, a partner in West Monroe’s healthcare M&A group.
“Teladoc is doubling down its focus on its chronic care program, which has been a key revenue driving segment,” Festle said in an email. “Acquiring Catapult Health adds another channel for Teladoc’s chronic care enrollment by funneling patients from Catapult’s in-home diagnostic screenings into Teladoc’s chronic care management programs.”
This acquisition hasn’t been Teladoc’s only attempt to grow chronic care enrollment. It recently joined Amazon’s Health Benefits Connector, which matches people to digital health programs outside of Amazon that are covered by their employers.
One telehealth executive said the deal helps Teladoc Health solve a key challenge in virtual health.
“The industry consensus remains that virtual urgent care, as a standalone offering, has limited long-term value unless it is bundled into a more comprehensive solution that enhances patient outcomes and commercial viability,” said Sean Mehra, founder and CEO of virtual primary care company HealthTap. “One of the persistent challenges in virtual care is the difficulty of obtaining lab values and biometrics remotely, creating friction in delivering more complete and effective virtual care. By introducing cost-efficient at-home testing kits, Teladoc is addressing a key barrier to virtual care adoption while strengthening its overall value proposition.”
Meanwhile, Laurent Martinot, co-founder and CEO of sleep apnea company Sunrise, believes the deal highlights the growing interest in at-home testing.
“When companies merge advanced at-home diagnostics with strong digital health capabilities, they can address a critical gap in patient care,” Martinot said. “Following the pandemic, the digital health market is increasingly looking for ways to bring growing value to patients, and at-home diagnostics serve as an essential tool for achieving that goal.”
Photo: AndreyPopov, Getty Images
