Teladoc buying home testing startup Catapult for $65M

Telemedicine provider Teladoc Health (NYSE: TDOC) agreed to acquire home testing company Catapult Health in an all-cash $65 million deal.

Why it matters: We've seen this movie — a troubled strategic taking on a home testing business — in health tech before.

The big picture: Home diagnostics in particular have seen a high degree of amalgamation following their pandemic-fueled boom, with dozens of M&A deals starting in 2021 with Ro's purchase of Kit.

By the numbers: Dallas-based Catapult reported $30 million in trailing 12-month revenue as of Q3 2024, per Teladoc.

Flashback: When Teladoc bought Livongo for $18.5 billion in 2020 at the height of the pandemic, the combined companies boasted an enterprise value of $37 billion.

• Teladoc has since struggled, reporting a historic loss of $13.7 billion in 2022, the majority from a write-off related to Livongo's plummeting value.
• The company's market cap is now below $2 billion.

How it (could) work: The acquisition could expand Teladoc's preventive care capabilities by integrating Catapult's at-home wellness exams, which allow members to check vitals, collect blood samples and consult virtually with a nurse practitioner.

What they're saying: "Teladoc's acquisition of Catapult Health is a logical tuck-in deal," Leerink analysts, including senior managing director Michael Cherny, wrote in a Wednesday research note.

Yes, but: "We still need to hear more about the fit that Catapult brings" Teladoc, the Leerink analysts wrote.

• "Given what has been a choppy M&A history, we think tuck-ins are reasonable, but also note that the biggest driver of improved stock performance remains stabilizing/improving the core," the analysts added.

What's next: The deal is expected to close in Q1 2025.

State of play: Home testing consolidation has been going on since COVID began declining in 2021. Relevant recent deals include:

• Digital pharmacy provider Truepill last summer agreed to be acquired by Ireland's LetsGetChecked for $525 million.
• Home test provider Imaware in 2023 acquired Binx Health's consumer testing division in an all-cash deal, and then was itself acquired by SuperTruth in 2024 to create a data firm valued at $100 million.
• Telehealth business Thirty Madison in 2023 bought patient file assets from bankrupt The Pill Club for $23.2 million after acquiring women's health testing startup Nurx the year prior.
• Testing company Everly Health in 2021 bought three companies: diagnostic clinician network PWNHealth, lab test provider Home Access Health and fertility startup Natalist.