If you’ve found yourself scouring the internet for some medical advice and landed on WebMD, you’re not alone. With over a million likes on Facebook, WebMD is known to provide health and well-being information online. What’s more, this virtual healthcare giant is all set to acquire the digital employee well-being company Limeade (ASX: LME) for over $100 million.
Under the unanimously approved terms of the merger agreement, WebMD will take ownership of all outstanding shares of Limeade common stock, including shares underlying Limeade’s outstanding CHESS Depository Interest (CDIs). This acquisition will be facilitated through a merger between a wholly-owned subsidiary of WebMD and Limeade, resulting in Limeade becoming a wholly-owned subsidiary of WebMD.
Limeade CEO, Henry Albrecht, commented, “Limeade and WebMD Health Services creates the only truly complementary combination of culture and well-being in the market, allowing us to maximize health and well-being for all people and deliver better service, support and capabilities for our clients.
“We are confident that the combination will bring together WebMD Health Services human expertise and Limeade technical innovation into a comprehensive solution that will have a positive impact on people and companies worldwide”
WebMD Health Services is a provider of personalised well-being solutions for employers, health plans, and government organisations. It has a comprehensive suite of tools, including digital health solutions, one-on-one coaching, wellness challenges, and custom communications services, supports. Plus, it is available via desktop, tablet, and mobile apps.
In February 2023, WebMD Health Services announced the global expansion plans for its WebMD One well-being program. WebMD One is dedicated to employee well-being, much along the lines of what Limeade does. Given that, it is likely that the Limeade acquisition could be part of enabling that expansion. Seeing that WebMD is introducing new brands and launching new programs, it is easier to acquire established platforms than start from scratch.
As part of the agreement, Limeade shareholders will receive $0.425 per share in an all-cash transaction. This deal values Limeade, on a fully diluted basis, at approximately $111.5 million. Remarkably, this per share purchase price represents a staggering 325% premium over the closing price of Limeade’s CDIs on the ASX as of June 8, 2023.
To ensure the smooth completion of the merger, Limeade will be subject to exclusivity obligations, including restrictions on seeking alternative offers and notification requirements. The merger agreement also includes provisions for a matching right regime, allowing Limeade to consider any superior proposals it may receive. Moreover, the agreement outlines circumstances in which Limeade may be required to pay a termination fee of $3.6 million to WebMD.
In a significant show of support, certain Limeade shareholders, including CEO Henry Albrecht and affiliates and family members, TVC Capital, and Oak HC/FT, have executed voting agreements, collectively representing approximately 42% of Limeade shares.
Not too long ago, the Company had laid off 15% of its workforce in a bid to boost savings. In 2022, it incurred losses to the tune of $17 million, and its dwindling finances have remained consistent for quite some time. Now, it is returning to form thanks to WebMD’s generous deal.
The transaction is anticipated to settle by September 2023.
Alinda is a Business Reporter for The Sentiment
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