Investors in Teladoc (TDOC -0.07%) were no strangers to acquisitions coming into 2020. Since it was founded in 2002, the company has used deals to build a network of physicians offering virtual care to users in 175 countries. Little did they know 2021 would transform the company because of two large deals -- one huge -- and a pandemic.
Shareholders who've held on are happy, though. The stock currently sits around $200, up 133% from where it started the year. If you had invested $1,000 in January, you would now have more than $2,300.
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The deals
In January, Teladoc purchased InTouch Health for a mix of cash and stock worth $600 million. The deal added more than 14,500 physicians globally to the company's network. InTouch had a contract with 30 of the 50 largest health systems in the U.S., and its 40 specialties expanded Teladoc's offerings to better serve patients across all of their needs.
In August, management announced it was buying Livongo, a provider of diabetes management and health monitoring, for $18.5 billion. This deal essentially doubled the size of the company and further extended Teladoc's presence across the entire patient journey.
The pandemic
Both companies have experienced rapid growth during the pandemic. More members have translated into revenue, and the combination of businesses may provide a glimpse into how healthcare will be provided in the future.
| Teladoc Metrics | Q1 2020 | Q2 2020 | Q3 2020 |
|---|---|---|---|
| YOY member growth | 61% | 92% | 47% |
| YOY revenue growth | 41% | 85% | 109% |
Data source: Teladoc press releases. YOY = year over year.
| Livongo Metrics | Q1 2020 | Q2 2020 | Q3 2020 |
|---|---|---|---|
| YOY member growth | 100% | 113% | 113% |
| YOY revenue growth | 115% | 125% | 126% |
Data source: Livongo press releases. YOY = year over year.
Obviously, Teladoc and Livongo were big winners from the reliance on remote health services this year. But Livongo's pace hasn't changed much. By combining the businesses, investors and management of each company's customers will buy the other's service, keeping up the pace of growth in 2021. So far, there are no signs of slowing down.
