Mergers & Acquisitions in Telehealth: What Does This Mean?
In May 2018, American Well announced the acquisition of Avizia to vertically deepen their acute-care telemedicine offerings. A few weeks later, it was announced that Teladoc acquired Advance Medical, a Spain-based company. This is horizontal growth with the aim of gaining international marketshare, especially in Asia and South America. Through mergers and acquisitions, these companies are attempting to gain economies of scale, leverage, and access to new telehealth markets.
What do these developments mean for the global telehealth industry?
Mergers and acquisitions of telemedicine companies ought to be seen as a positive development in the telehealth industry. It is an indicator that this industry is growing and companies are trying to expand their footprint. It demonstrates that Telehealth is becoming more relevant to our society and the healthcare sector of the economy.
When companies reach a certain threshold of growth, they often strategically downsize to become more nimble. Such is the expansion and contraction one would expect for companies in any dynamic industry. Cisco is a great example: In the first couple of decades of their existence, Cisco grew exponentially. However, in recent years they have split off elements of their business into separate companies (for example, Avizia is a spinoff of Cisco).
Likewise, Orbit Health Telepsychiatry is a company to watch in coming years. This company, which offers telepsychiatry jobs to serve patients in need, is ascending. Orbit Health is quickly positioning itself to be the center of the telepsychiatry market. Is a merger or acquisition in the future of the company? It’s too early to tell. Regardless, the telehealth industry is booming these days. Mergers and acquisitions are some of the many signs that this industry is a freight train gaining momentum.