Grand Rounds strikes merger with Doctor on Demand

Putting puzzle pieces together on sky background with sunlight mergerPutting puzzle pieces together on sky background with sunlight merger

When Teladoc closed its $18.5B acquisition of Livongo, it set the stage for more mergers to come. Now, two more established digital health companies are pairing up.

On Tuesday, Grand Rounds announced plans to merge with Doctor on Demand, creating a company that would build on Grand Rounds’ care navigation services with the latter’s telehealth platform.

“No one has done this before, combining navigation and virtual care delivery. We think it’s the future,” Grand Rounds Co-Founder and CEO Owen Tripp said in a news release. He will become the CEO of the combined company.

The two digital health startups decided to merge as they expected patients to meet more with their medical teams online — a change that was further accelerated by the Covid-19 pandemic, according to Grand Rounds Corporate Marketing Director Jenn Davis.

“Both of our companies were moving quickly to meet this demand, and as we were evaluating a potential merger, we realized strong synergies across our platforms and teams,” she wrote in an emailed statement.

The companies did not disclose the terms of the all-stock deal, but they expect that the combined entity will have about 2,000 employees.

For now, both startups will keep their current names, and Hill Ferguson will remain CEO of Doctor on Demand. After the deal closes, he’ll have a seat on the combined company’s board.

San Francisco-based Grand Rounds, which was founded in 2011, started off as a second-opinion service by offering virtual consultations with specialists. Since then, it has built out programs to help employees navigate their health benefits and find in-network providers, bringing on big clients including Walmart and  Home Depot.

Last fall, it raised $175 million, which it planned to use to build out virtual primary care services. But with an upcoming merger, the combined company should have that covered.

Doctor on Demand, which was founded in 2012, is competing with publicly traded companies Teladoc and Amwell for a slice of the telehealth market. Earlier this year, it launched a virtual primary care plan with Texas-based managed care organization Community Health Choice.

The idea behind the deal is to combine Grand Rounds’ patient navigation and advocacy services with virtual primary care, building an end-to-end solution — and creating a more comprehensive telehealth service than the virtual urgent care visits of the past.

“I am incredibly excited about what the merger of our two companies means for the delivery of healthcare in this country,” Doctor on Demand President Robin Glass wrote in an emailed statement. “We will build the first truly integrated virtual care and care navigation model to address the enormous problem of uncoordinated care, meaning reduced costs, improved health outcomes and a dramatically better patient experience.”

The deal is expected to close in the first half of 2021, subject to regulatory approval and closing conditions.

Photo credit: IvelinRadkov, Getty Images

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