Teladoc Health Acquires Catapult Health for $65M, Boosting Chronic Care Management and At-Home Testing Capabilities

Teladoc Health, a leading telehealth provider, has announced a definitive agreement to acquire Catapult Health, a virtual preventive care company, for $65 million. The all-cash deal, which includes an additional $5 million contingent payment, is expected to close in the first quarter of 2025, subject to customary closing conditions.

Expansion of Chronic Care Management Services

The acquisition aims to enhance Teladoc's chronic condition management programs, a key focus area for the company. Catapult Health's virtual annual exam service, which utilizes at-home diagnostic kits for blood sampling, blood pressure checks, and other health screenings, will be integrated into Teladoc's existing offerings.

Catapult's clinicians will be able to directly enroll eligible patients in Teladoc's chronic care programs for diabetes, hypertension, pre-diabetes, and weight management. This integration is expected to streamline patient care and improve early detection of health conditions.

Chuck Divita, CEO of Teladoc Health, stated, "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."

At-Home Testing and Preventive Care Expansion

The deal marks a significant expansion into at-home diagnostic testing for Teladoc. Catapult Health, founded 15 years ago as an on-site preventive health checkup solution, transitioned to remote services in 2020 due to the COVID-19 pandemic. Their at-home diagnostics kit, paired with telehealth visits with nurse practitioners, has proven effective in identifying health risks.

According to Teladoc, 30% of Catapult's members have discovered high blood pressure and 28% learned they have prediabetes for the first time through these services. An independent analysis found that Catapult Health's VirtualCheckup solution delivers more than $1,400 in cost savings over a three-year period.

Financial and Market Implications

The acquisition comes as Teladoc focuses on cutting costs and restructuring its business under new CEO Chuck Divita. While the company experienced significant growth during the COVID-19 pandemic, it has faced challenges in recent years, including a declining stock price and financial losses.

For the first nine months of 2024, Teladoc reported a 1% decrease in revenue compared to the previous year, totaling $1.9 billion. The company also logged a net loss of $953 million during this period, compared to $191 million in the same period of 2023.

Catapult Health, with trailing 12-month revenue of $30 million as of Q3 2024, brings hundreds of employer customers and more than three million covered lives to Teladoc's existing user base of 93 million members.

As Teladoc navigates a competitive telehealth market, the company sees opportunities for growth by providing services to health plans, health systems, employers, and consumers. The integration of Catapult Health's technology is expected to enhance Teladoc's existing products, including the provision of lab-confirmed A1c results to health plans for population enrollment determination.