Livongo Acquisition of Retrofit Bolsters Consolidation Talk in Wellness Industry

In the health and wellness space, consolidation is brewing as more companies wish to broaden their offerings to address a larger range of health issues.

Digital health company Livongo Health announced April 17 that it has acquired Chicago-based wellness company Retrofit.

Mountain View, California-based Livongo’s focus as a company has been to empower people with chronic conditions such as diabetes and hypertension to live healthier lives, while Retrofit’s programs address overall health concerns through healthy nutrition, exercise and weight management programs.

“This type of agreement exemplifies an ongoing trend in the well-being space for alliances and M&A activity, and one that aligns with deal activity in the broader health care market,” said Kristin Parker, partner and total health management specialty practice leader at Mercer.

Livongo is not disclosing terms of the deal, but CEO Glenn Tullman said Livongo found a lot of value in what the acquisition could add to the company’s capabilities. The acquisition also comes on the heels of Livongo raising $105 million in venture funding to broaden the use of its platform.

By combining forces, the company can offer existing customers more services than before and also help to consolidate their health management in one place, Tullman said. Although Livongo started out by focusing on diabetes and blood pressure, over time it has changed focus to the whole person and overall health. The Retrofit acquisition can help them address on a broader set of health issues.

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Livongo CEO Glenn Tullman

“There was no doubt weight management would be our next stop,” he said. “Retrofit, like Livongo, is heavily focused on data science and has demonstrated clinical outcomes. Sharing similar values and working toward a common mission, yet offering complementary programs, drew us to Retrofit as we began expanding from diabetes to other multiple chronic conditions.”

Livongo will gain Retrofit’s evidence-based Diabetes Prevention Program and its client base, which includes Fortune 1,000 employers across many industries, according to the press release. The company will also gain Retrofit’s 80 Chicago-based employees, including CEO Mary Pigatti, who will continue to oversee Retrofit when she joins Livongo.

The acquisition will strengthen the companies’ ability to bring personalized solutions to clients, according to Pigatti.

“Retrofit and Livongo are like-minded in strategy, values and culture,” she said in a statement. “Together, we will provide a comprehensive set of solutions for the prevention and treatment of chronic conditions that address the whole person.”

There has been a flood of consolidation activity in health care today, and the wellness industry is no exception, according to Candace Saldarini, M.D., medical director at ODH, Inc., a health technology company based in Princeton, New Jersey. Other deals in the M&A space this past couple years include the partnership of Amazon, Berkshire Hathaway and JPMorgan Chase & Co. CEOs; Humana’s acquisition of Kindred Healthcare; and the CVS and Aetna merger.

The force behind all the activity is that companies are interested in using the capabilities of technology innovations to deliver better outcomes and lower costs.

Livongo’s attempt to make its wellness offerings broader and focused on overall health also fits with general trends in the market.

“While condition-specific programs will continue in the short term, we see a more holistic approach in the future,” she said. “For example, diabetes programs will need to address the total needs of individuals with diabetes, including any other physical health conditions, associated behavioral health care needs like depression or anxiety, and social needs like food insecurity.”

She expects to see more deals in the future involving organizations that want to address physical health while also addressing social and behavioral needs in their programs.

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Lorna Borenstein, CEO of wellness technology company Grokker

Lorna Borenstein, CEO of wellness technology company Grokker, also believes that consolidation in the market will continue as two forces converge — the trend toward holistic solutions and employees who don’t necessarily have the time to take care of themselves. They’re looking for effective and efficient ways to get healthier.

“These two forces combined with the fact that employers need better ways to address skyrocketing employer health care costs while simultaneously attracting and retaining employees, means that the days of the niche solution and the days of the platform without effective content are over, and consolidation is here to stay,” Borenstein said.

Andie Burjek is a Workforce associate editor. Comment below or email editors@workforce.com.