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Accolade to buy telehealth startup 2nd.MD in $460 million deal

·1 min read

Jan 14 (Reuters) - Healthcare services provider Accolade Inc said on Thursday it would buy telehealth startup 2nd.MD for about $460 million to double its addressable market and tap into growing demand for virtual services.

Accolade's shares rose 7.4% in extended trading.

The unrelenting surge in coronavirus cases and social distancing measures implemented to control the pandemic have prompted people to turn to virtual consultation and treatment offerings.

Innovation Specialists LLC, which does business as 2nd.MD, serves over 300 employers and their more than seven million employees. The company, which reported unaudited revenue of about $35 million last year, connects the workers of its partners with medical experts for an expert second opinion via video or phone.

The deal, expected to close by the end of February, will consist of $230 million in cash, $130 million in Accolade common stock and up to $100 million of Accolade's common stock payable upon the achievement of defined revenue milestones.

The deal will expand Accolade's addressable market by an estimated $22 billion, it said, adding that the transaction will add to its revenue growth in fiscal 2022 at a similar gross margin profile.

(Reporting by Praveen Paramasivam in Bengaluru; Editing by Amy Caren Daniel)