SOC Telemed, Inc. (NASDAQ: TLMD), the largest national provider of acute care telemedicine, today announced that it has entered into a definitive agreement to be acquired by Patient Square Capital, the leading dedicated health care investment firm.
Under the terms of the agreement, SOC Telemed stockholders will receive $3.00 in cash per share of Class A common stock (“the common stock”). The per share purchase price represents a premium of approximately 366.1% over SOC Telemed’s closing share price on February 2, 2022, the last full trading day prior to the transaction announcement and a 93.1% premium to SOC Telemed’s sixty-day volume-weighted average price (VWAP) through February 2, 2022.
The Board of Directors of SOC Telemed (the “Board”), having determined that the transaction is in the best interests of the Company’s stockholders, has unanimously approved the transaction and recommends that Company stockholders approve the transaction and adopt the merger agreement at the Special Meeting of Stockholders to be called in connection with the transaction. Stockholders collectively holding approximately 39% of the outstanding shares of common stock have entered into a voting agreement pursuant to which they have agreed, among other things, to vote their shares of the Company’s common stock in favor of the transaction.
Steve Shulman, Chairman of the SOC Telemed Board of Directors, said, “Patient Square Capital’s acquisition of SOC Telemed, which is the culmination of a comprehensive process, represents a compelling opportunity for all stakeholders. After being approached by Patient Square Capital, we formed an independent committee of the Board, which thoroughly reviewed the proposal with the assistance of independent financial and legal advisors. Following the independent committee’s unanimous recommendation, the Board unanimously determined that the all-cash offer unlocks maximum value to stockholders, and that the experience and resources of Patient Square Capital would best position the Company for growth in the years to come. Lastly, today’s announcement is a testament to the hard work of the SOC Telemed team, which worked tirelessly to achieve an optimal outcome for our stakeholders.”
Upon completion of the transaction, SOC Telemed will become a private company with the flexibility and resources to continue investing in its clinical capabilities, innovating its offering and expanding its footprint.
Following the completion of the transaction, SOC Telemed will continue to be led by Dr. Chris Gallagher, Chief Executive Officer, who assumed the role of CEO in September of 2021. Dr. Gallagher was previously Co-Founder and CEO of Access Physicians, a high growth and experienced multi-specialty acute care telemedicine business that was acquired by SOC Telemed in March of 2021.
“Today’s announcement validates SOC Telemed’s market-leading technology-enabled clinical services platform for acute care telemedicine, which we have deployed across more than 1,000 facilities nationwide,” said Dr. Gallagher. “The last several years have revealed the critical ways that technology can expand access to care, improve clinician efficiency, and enable more cost-effective care delivery. Achieving those goals will require focus, time and meaningful investment in the years to come. We believe that as a private company, with the expertise and support of the team at Patient Square Capital, SOC Telemed will be best positioned to meet the growing needs of patients, physicians and our hospital partners.”
Patient Square Capital brings to SOC Telemed extensive and relevant experience with health systems and provider organizations. The Partners at Patient Square have spent years on the boards of directors of leading health care organizations, including: HCA, Duly Health and Care (formerly DuPage Medical Group), OB Hospitalist Group, Envision Healthcare, Summit BHC, Covenant Physician Partners and Access Physicians, among others.
“Having served on the board of Access Physicians prior to its acquisition by SOC Telemed, I had the opportunity to see first-hand the vital role that inpatient telemedicine can play in transforming clinical workflows, addressing clinician shortages, and enabling timely and high-quality patient care,” said Karr Narula, Founding Partner of Patient Square. “We look forward to partnering with Dr. Gallagher and the SOC Telemed team to invest meaningfully in the business to further accelerate growth and expand its offerings in the years to come.”
Transaction Details
The agreement includes a 30-day “go-shop” period, which allows the SOC Telemed Board of Directors and its advisors to actively initiate, solicit and consider alternative acquisition proposals from third parties. The SOC Telemed Board of Directors will have the right to terminate the merger agreement to enter into a superior proposal subject to the terms and conditions of the merger agreement. There can be no assurance that this “go-shop” will result in a superior proposal, and SOC Telemed does not intend to disclose developments with respect to the solicitation process unless and until it determines such disclosure is appropriate or otherwise required. Following the expiration of the go-shop period, SOC Telemed will be subject to customary “no-shop” restrictions on its ability to solicit acquisition proposals from third parties or to provide information to and engage in discussions with any third parties in relation to an alternative acquisition proposal, subject to customary exceptions that permit the SOC Telemed Board of Directors to comply with its fiduciary duties.
The transaction is expected to close in the second quarter of 2022, subject to the satisfaction or waiver of customary closing conditions, including the approval by SOC Telemed stockholders and receipt of Hart-Scott Rodino antitrust approval in the U.S. Upon closing of the transaction, SOC Telemed’s common stock will no longer be listed on any public market.
Fourth Quarter 2021 Financial Results
SOC Telemed will publish its results for the full year and fourth quarter of 2021 by March 31, 2022.
Advisors
William Blair is acting as exclusive financial advisor to SOC Telemed, Orrick, Herrington & Sutcliffe LLP is acting as deal legal counsel to SOC Telemed and DLA Piper LLP is acting as healthcare legal counsel to SOC Telemed. Kirkland & Ellis LLP is acting as deal legal counsel to Patient Square Capital and Latham & Watkins LLP is acting as healthcare legal counsel to Patient Square Capital.
About SOC Telemed
SOC Telemed (“SOC”) is the leading national provider of acute telemedicine technology and solutions to hospitals, health systems, post-acute providers, physician networks, and value-based care organizations since 2004. Built on proven and scalable infrastructure as an enterprise-wide solution, SOC’s technology platform, Telemed IQ, rapidly deploys and seamlessly optimizes telemedicine programs across the continuum of care. SOC provides a supportive and dedicated partner presence, virtually delivering patient care through teleNeurology, telePsychiatry, teleCritical Care, telePulmonology, teleCardiology, teleInfectious Disease, teleNephrology, teleMaternal-Fetal Medicine and other service lines, enabling healthcare organizations to build sustainable telemedicine programs across clinical specialties. SOC enables organizations to enrich their care models and touch more lives by supplying healthcare teams with industry-leading solutions that drive improved clinical care, patient outcomes, and organizational health. The company was the first provider of acute clinical telemedicine services to earn The Joint Commission’s Gold Seal of Approval and has maintained that accreditation every year since inception. For more information, visit www.soctelemed.com.
About Patient Square Capital
Patient Square Capital is a dedicated health care investment firm that partners with best-in-class management teams whose products, services and technologies improve health. We utilize our deep industry expertise, our broad network of relationships and a true partnership approach to make investments in companies that will grow and thrive. We believe in the power these companies have to improve patient lives, strengthen communities and create a healthier world. Patient Square is purpose built by a team of industry-leading executives, differentiated by the depth of our focus in health care, the breadth of our health care investing experience, and the network we can activate to drive differentiated outcomes. Most importantly, patients are squarely at the center of all that we do. For more information, visit www.patientsquarecapital.com.
