SOC Telemed has acquired Access Physicians to solidify its market position in the acute care telehealth space.
The cash and stock transaction is valued at roughly $194 million, with additional potential consideration based on performance, according to the company in a press release.
By acquiring Dallas-based Access Physicians, a multispecialty acute telemedicine provider, SOC Telemed is now the largest pure-play provider of acute care telemedicine in the nation, the company said.
By combining with Access Physicians, SOC Telemed will deliver acute telemedicine services to nearly 1,000 facilities, including more than 700 hospitals across 47 states.
The combined company is estimated to have approximately $107 million to $113 million in pro forma annual revenue in 2021.
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"Access Physicians and SOC Telemed’s technology-enabled, multi-specialty clinical solutions and customer base are complementary and serve to capitalize on the growth opportunities in acute care telemedicine,” said John Kalix, CEO of SOC Telemed, in a statement. “As we work to address health inequities, our combined organization creates a single partner for customers to optimize care delivery.”
In a growing acute care telemedicine market, the merger increases SOC Telemed’s national footprint and grows provider breadth and depth, company executives said.
SOC Telemed's clinical service lines will expand to include infectious disease, cardiology, maternal-fetal medicine and nephrology in addition to its core services of neurology, psychiatry, critical care and pulmonology.
“Our shared belief in a patient and clinician-centric approach was key to this relationship,” said Chris Gallagher, M.D., CEO of Access Physicians, who joins the SOC Telemed board in connection with the acquisition.
“Access Physicians has long held a commitment to providing the very best patient care possible, and we felt SOC Telemed shared that mission. We sought out a company that would not only share our vision, but also broaden our combined capabilities to accelerate the realization of our vision," Gallagher said.
The combined companies' acute telemedicine portfolio helps meet the challenges of a market struggling with physician specialty shortages and inequities in access to specialized care.
“When we developed Telemed IQ, which enables providers to securely deploy, optimize and scale a telemedicine program, we built it with an eye on the future,” Kalix said. “The robust capabilities enabled by Telemed IQ, built with an unwavering focus on cybersecurity, will provide the backbone required to make this combination successful and enhance our ability to meet the emerging needs of organizations across the nation. As we currently support more than 20 clinical service lines today, Telemed IQ provides the foundation required to enable our continued growth.”
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As healthcare systems face significant challenges around clinician shortages, health inequity and physician burnout, the combined company is uniquely positioned to address those needs with its more than 750 available clinicians and secure technology platform, the company said.
In October, SOC Telemed merged with special purpose acquisition company Healthcare Merger Corp. to go public. The company reported $58 million in annual revenue in 2020, down 12% from $66 million in 2019.
Revenue in the fourth quarter of 2020 came to $14.5 million compared to $16.6 million, a 13% decrease due to lower utilization of core services resulting from a decrease in hospital visits tied to the COVID-19 pandemic, the company reported.
Orrick, Herrington & Sutcliffe LLP served as legal adviser for SOC Telemed, and Armentum Partners LLC served as the company's financial adviser.
Jackson Walker LLP served as legal adviser for Access Physicians.