Dive Brief:
- Transcarent, a healthcare platform for self-insured employers, will acquire benefits navigator Accolade for about $621 million, the companies announced Wednesday.
- The deal will combine Transcarent’s offerings — including an artificial intelligence-backed information and navigation service, health benefits guidance and virtual care — with Accolade’s services, like providing virtual primary care and specialist consultations, as well as patient advocates and care navigation.
- The acquisition will net Accolade stockholders $7.03 per share in cash, an approximately 110% premium over the company’s closing stock price on Tuesday. Transcarent’s CEO, noted entrepreneur and investor Glen Tullman, will head up the combined organization, according to a spokesperson.
Dive Insight:
Founded in 2020, Transcarent says it aims to provide a one-stop shop for workers navigating their benefits, looking for providers and accessing healthcare services. The company is a unicorn, most recently raising a $126 million Series D funding round in May last year that brought its total valuation to $2.2 billion.
Meanwhile, Accolade was founded nearly two decades ago and went public in 2020. The company offers a suite of navigation offerings, largely to employers, to assist employees with managing and understanding their benefits.
The combination of the two benefits technology companies, funded through financing from venture capital firm General Catalyst and Tullman’s 62 Ventures, will take Accolade private and create a single firm with more than 1,400 employer and payer clients, according to a press release.
The boards of both companies have already approved the acquisition, which is expected to close in the second quarter.
The deal would bring together both navigators’ services, including Transcarent’s WayFinding offering — a generative AI product launched last year where users could ask questions about which healthcare services are covered and how much they might cost, the companies said.
“The two companies share a focus on embracing AI and advanced technology to change the way consumers experience the healthcare system,” Rajeev Singh, Accolade’s CEO, said in a statement.
The acquisition comes after Accolade reported a nearly $100 million net loss during its 2024 fiscal year ended last February, compared with a nearly $460 million loss in 2023. The company reported revenue of $414 million in fiscal 2024, an 18% increase from the prior year.
The benefits navigator is expected to release earnings for its third quarter of fiscal 2025 on Thursday. Accolade expects adjusted earnings before interest, taxes, depreciation and amortization to be a loss between $3 million and $5 million and revenue between $104 million and $107 million.
Similarly, Transcarent is not yet profitable, Tullman told Forbes in May. The company has instead been focused on growth, including through M&A — Transcarent acquired telehealth vendor 98point6 for $100 million in 2023 — though it hopes to reach profitability in the next few years.