Health Insurance Innovations Inc. (NASDAQ: HIIQ) of Tampa has acquired a Coral Springs-based health care network in a cash and stock transaction.
TogetherHealth, a direct-to-consumer platform that connects individuals with insurance carriers through consumer acquisition and engagement was acquired for $50 million in cash and 630,000 shares of Health Insurance Innovations’ common stock.
A five-year earn-out provision based on the future performance of the acquired businesses is also included in the transaction, according to a release.
Health Insurance Innovations expects the acquisition to contribute at least $10 million of adjusted earnings before interest, taxes, depreciation and amortization for the remainder of fiscal 2019, which assumes any incremental increase in earnings will be reinvested back into building a market-leading position in more than 65 health insurance and supplemental insurance markets.
“This transformative acquisition offers immediate scale for us in the large and growing over-65 insurance market. This segment of the market continues to benefit from the strong, multidimensional tailwinds of changing demographics, as over 10,000 Americans a day turn 65 and age into Medicare,” said Gavin Southwell, Health Insurance Innovations CEO and president, said in a statement.
Health Insurance Innovations is cloud-based technology platform and distributor of affordable health insurance, life insurance and supplemental plans.
The acquisition, according to Southwell, will further leverage the company’s tech platform.
“We believe we can quickly leverage their resources to capitalize on this opportunity and continue to build our presence in this market,” said Robert Gregg, CEO of TogetherHealth, in a statement.
The acquisition is allowing Health Insurance Innovations to raise its 2019 revenue outlook to $450 million to $460 million, with an adjusted guidance of $82 million to $87 million, according to a release