This article was written by Mergermarket, the leading provider of forward-looking M&A intelligence and data to M&A professionals and corporates around the world.
By Dane Hamilton
July 30, 2018
Sharecare, which operates a digital health and wellness platform, is planning a series of complementary acquisitions of various sizes to expand its product offerings, according to founder and CEO Jeff Arnold.
Atlanta-based Sharecare, which has raised about USD 380m to date from strategic and private equity investors, last week disclosed its 12th acquisition since its founding in 2010. Window Channel Network, its latest, makes relaxation and meditation videos, which will be streamed through its Sharecare app, Arnold said. The purchase price was undisclosed.
“We are looking at acquisitions of companies with no revenue to those with USD 600m of revenue,” said Arnold, an entrepreneur who founded WebMD and was CEO of companies including HowStuffWorks.
The acquisition strategy comes at a time when privately held Sharecare is looking to publicly list shares in the next two years in a move that Arnold said could value the company at USD 4bn.
Sharecare contracts with large employers, HMOs and hospital systems to reduce healthcare costs by designing individual health plans for employees. The plans give employees tools and data to promote healthy behavior, such as encouraging exercise, weight loss, smoking cessation, better eating habits, medication adherence for chronic conditions like asthma and diabetes and myriad other offerings.
Fast-growing Sharecare generated around USD 400m in TTM revenue and has some 34m active users, including employees of large enterprises like State Farm, AT&T [NYSE:T], Walmart [NYSE:WMT] and states including Georgia and Hawaii.
The company competes in a ballooning consumer digital health space with myriad companies offering apps, data and content to support better consumer health in what Arnold said is a “USD 40bn addressable market.”
To add to its offerings, Sharecare is looking to buy or build a service that will better match consumers with physicians and specialists, including such factors as the numbers of procedures a doctor has done, their charges and success measures like hospital readmission rates, said Arnold. The objective, he said, is to “demystify” the process of choosing doctors and hospitals, he said.
Sharecare is also looking to enhance offerings for seniors in the Medicare Advantage market that will allow them to better pick appropriate home health providers and coverage plans, said Arnold.
Sharecare so far hasn’t used bankers for any of its acquisitions, preferring to rely on internal business development executives, the CEO said. “We have a great corporate counsel and our internal corporate development team is very strong,” he said.
“Our vision is to have all of your health in one place,” said Arnold. For acquisitions, “we are picking the best in breed.”
Arnold said he aims to have 100m active users and generate USD 1bn in revenue by 2020, a goal that will be executed both from organic growth and acquisitions to enhance product offerings.
The company raised USD 380m so far from a variety of media, entertainment, healthcare and financial investors, including Oprah Winfrey’s Harpo Productions, Sony Pictures, HCA [NYSE:HCA], Trinity Health, Summit Partners, Swiss Re and others, none of which have a majority stake. It disclosed last week that Wells Fargo Strategic Capital invested USD 20m in the company and hopes to offer the service to its employees.