Castlight Health share price announced on Wednesday morning Vera overall health Buy Spotlights 370 million U.S. dollars to privatize it.
As one of the early-stage digital health companies, the San Francisco-based medical navigation platform aims to help consumers better understand their out-of-pocket expenses so that they can save on medical expenses. The company’s goal is to literally articulate the opaque world of medical expenses.
However, after the highly touted IPO in 2014, Castlight has never lived up to the hype. After briefly hitting $40 per share in the IPO, its stock has languished. On Tuesday, before the announcement, the stock closed at only $1.64. In the last quarter ended September 30, the company lost $1.9 million, compared with a loss of approximately $500,000 in the same period last year.
Vera is a Seattle-based value-based primary care provider. All of Castlight’s outstanding shares are US$2.05 per share, a 25% premium to Tuesday’s closing price and a 35% premium to the 30-day weighted average share price. The stock basically matched the price per share in trading on the New York Stock Exchange on Wednesday afternoon.
The transaction was unanimously approved by Castlight’s board of directors, but it still needs to be reviewed by regulators. Castlight has many competitors, from PokitDot, which helps consumers purchase treatment and medical services, to MPIRICA Health Analytics, another cloud-based platform that focuses on transparency related to medical quality.
Insurance companies and self-insurance employers are cooperating with medical navigation platforms to reduce costs while helping patients optimize treatment in a decentralized medical system. Through the Castlight and Vera pairing, investors hope to expand these efforts in a way that better serves consumers and expands the scope of the combined entity.
Vera’s major equity holders Clayton, Dubilier & Rice have pledged to invest up to 338 million U.S. dollars in the new enterprise, and Castlight’s major customer Anthem also plans to invest in the combined company. Ron Williams, former chairman and CEO of Aetna, will serve as chairman of the new company.
“We believe that the combined company has a unique opportunity to provide large-scale innovation to the commercial customer base and accelerate the restructuring of the healthcare market to pay more attention to value,” said Williams, who is also a CD&R fund operations consultant. In the press release announcing the merger.
Morgan Health, a JPMorgan Chase company seeking to transform employee health care, and Central Ohio Primary Care, the primary care group owned by the largest doctor in the United States, have also been designated as strategic partners of the combined company.
In a statement, Maeve O’Meara, who took over Castlight President In 2019, the merger will be touted as an opportunity to provide a personalized patient experience while helping providers improve results and reduce costs.
Although Castlight has been able to document medical cost savings, it is difficult to communicate these savings in a clear and easy-to-understand way. Moreover, this is a crowded area in terms of helping consumers shop around. And many options are free. This made its business growth a challenge, but Castlight still found ways to strategic partnerships, such as working with long-term customer Anthem.
O’Meara has previously emphasized the importance of building relationships with all levels of the organization, from welfare consultants to health plans, in order to have a healthy and growing business. The merger with Vera will greatly expand these relationships to expand its influence as part of the combined company.
A publicist declined to elaborate on the details in the press release, including what the role of O’Meara is or what position Ryan Schmid, founder and CEO of Vera, will hold in the combined company.
“We believe this is a milestone in the healthcare system because it incorporates benefits and care navigation (including digital touchpoints) into the patient’s primary care relationship,” added Ravi Sachdev, CD&R partner and Vera board member. Press release. “We believe that the combination of these two innovative companies will change the care of the local market across the country.”
Photo: PeopleImages, Getty Images
