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 - Seite 2

The combination joins two highly complementary companies to create an unmatched, comprehensive platform for virtual healthcare delivery. By bringing together leaders in virtual health and chronic condition management, the merger combines:

• Comprehensive clinical expertise with a rich technology and data-driven experience
• Prevention and chronic condition management with acute and specialty care
• Behavior change expertise with data science
• Global footprint with products meeting a global need
• Access with innovation
• Two of the fastest growing companies in health technology

The combined company will have expected 2020 pro forma revenue of approximately USD 1.3bn, representing year-over-year pro forma growth of 85 percent, and pro forma adjusted EBITDA of over USD 120m. The combined company is positioned to execute quantified opportunities to drive revenue synergies of USD 100m by the end of the second year follow completion, reaching USD 500m on a run rate basis by 2025. These opportunities include increased cross-selling and penetration into each company’s client base, accelerating Livongo’s international expansion through Teladoc Health’s existing footprint, improving member retention rates and driving more efficient enrollment.

Almost five years ago, Kinnevik put in place a strategy to apply its learnings from consumer-centric and technology-enabled transformation of other sectors to healthcare. We sought to leverage technology, data science and clinical innovation to yield better, more accessible and lower cost care. Livongo was our second investment as part of this strategy, with the vision to create a whole person platform to empower people with chronic conditions to live better and healthier lives. Today, Kinnevik’s portfolio of digital health companies also includes Babylon, Cedar, Cityblock and VillageMD. The proposed transaction is a testament to the value of Livongo’s platform and validates Kinnevik’s healthcare investment strategy. In total, Kinnevik has invested SEK 3.5bn into its digital healthcare businesses, generating an exceptional 6.6x return on our total investment and an unrealized internal rate of return of over 150 percent, including the value of the proposed merger consideration.