Kinnevik supports the proposed merger between Teladoc Health and Livongo, and will own 4.5 percent of the combined company plus receive USD 143 million in cash consideration

Kinnevik AB (publ) (“Kinnevik”) today announced that it supports the proposed merger between Teladoc Health, Inc. (NYSE: TDOC) (“Teladoc Health”), the global leader in virtual care, and Livongo Health, Inc. (Nasdaq: LVGO) (“Livongo”), the leading Applied Health Signals company, creating the only consumer centered virtual care platform for a full spectrum of health needs. When the merger has been completed, Kinnevik will become an owner of a 4.5 percent stake in the combined company and receive USD 143m (SEK 1.3bn) in cash consideration. The merger consideration values Kinnevik’s stake in Livongo at approximately USD 2.0bn (SEK 17.6bn), up USD 183m (SEK 1.6bn) from the value of Kinnevik's stake in Livongo at 4 August 2020 close.

As announced today by Teladoc Health and Livongo, the companies have entered into an agreement to merge. Under the terms of the agreement, supported by the Boards of Directors of both Teladoc Health and Livongo, each share of Livongo will be exchanged for 0.592 Teladoc Health shares and USD 11.33 in cash, in total representing a value of USD 158.98 per Livongo share, based on the closing price of Teladoc Health on 4 August 2020. The value ascribed to Livongo in the merger represents a premium of approximately 56 percent to Livongo’ 30-day volume-weighted average price and a premium of 10 percent to the closing price of Livongo on 4 August 2020.

The transaction is expected to close by the end of Q4 2020, subject to regulatory approval, Teladoc Health and Livongo shareholder approvals, and other customary closing conditions. 

Kinnevik is today the second largest shareholder in Livongo, holding 13 percent of outstanding shares corresponding to 11 percent on a fully diluted basis. When the merger has been completed, Kinnevik will receive USD 143m (SEK 1.3bn) in cash and approximately 7.5 million shares in the combined company, corresponding to a 4.5 percent economic stake on a fully diluted basis. The merger consideration values Kinnevik’s stake in Livongo at approximately USD 2.0bn (SEK 17.6bn) in total, based on the closing price of Teladoc Health on 4 August 2020. Kinnevik supports the proposed merger, and has undertaken to vote in favor of the merger at an upcoming general meeting of Livongo shareholders, and to retain the main portion of its stake in Livongo until completion of the merger, subject to disposals according to customary conditions.