Vera Whole Health to merge with healthcare navigation company Castlight Health in $370M deal

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Castlight Health's stock soared 25% on Wednesday following the news. (Delmaine Donson/iStock/Getty Images Plus/Getty Images)

Advanced primary care provider Vera Whole Health has agreed to combine with healthcare data company Castlight Health in a $370 million all-cash deal.

The transaction entails integrating Castlight Health’s technology, a digital platform offered to employers and health plans with tools to help patients navigate the healthcare system, into Vera’s network of primary care clinics and providers.

Vera will pay Castlight $2.05 in cash per share of the company.

Castlight’s stock soared 25% on Wednesday following the news.

"Equipping our advanced primary care teams and our patients with Castlight's industry-leading digital navigation and engagement capabilities enhances our ability to reduce total cost of care while improving the social, mental and physical health of our patients," said Ryan Schmid, founder and CEO of Vera, in a statement. "Personalizing care plans and engagement campaigns while providing our care teams and patients with quality and cost data will greatly enhance the patient journey and our ability to manage commercial populations." 

The deal is expected to close in the first quarter of 2022.

The combined company will be privately held, so Castlight’s shares will no longer be available to trade on the public market once the deal is finalized.

Vera’s majority equity holder, Clayton, Dubilier & Rice, said it will invest up to $338 million in the combined firm, according to the companies.

Anthem, one of Castlight’s biggest customers, will also invest in the new company.

RELATED: Morgan Health makes $50M investment in Vera Whole Health

In August, Morgan Health, the healthcare-focused arm of JPMorgan Chase, invested $50 million into Vera Whole Health, the firm’s first investment in a coordinated care model.

Vera operates a network of primary care providers i 10 states—Alaska, Arizona, California, Idaho, Kansas, Missouri, Nevada, Oregon, Texas and Washington—and serves clients like Seattle Children’s and Blue Cross Blue Shield of Kansas City.

The company also inked a deal last year with Central Ohio Primary Care, the largest physician-owned primary care group in the country.

RELATED: Executive Spotlight—Ryan Schmid of Vera Whole Health wants to create a health revolution

Vera’s primary care model aims to address patient overall health, including physical, mental and social health, while providing cost efficiency for employers and payers.

The company said in August that it was looking to move toward value-based care models and away from fee-for-service.

"We believe this is a milestone for the healthcare system because of the way it merges benefits and care navigation, including digital touchpoints, into a patient's primary care relationship," said Ravi Sachdev, Clayton, Dubilier & Rice partner and member of Vera's board of directors. "We believe a combination of these two innovative companies will transform care in local markets across the country."

Care navigation has seen increased consolidation as tech companies look to expand their capabilities. In one of the biggest recent deals, telehealth company Doctor On Demand merged with Grand Rounds to form a "first of its kind patient-centric integrated virtual care company," officials announced in March. Two months later, the combined company bought Included Health, a startup that specifically provides navigation tools to LGBTQ employees. The company has now rebranded as Included Health.

In other M&A deals in this market, care navigation company Accolade nabbed medical second opinion startup 2nd.MD in a $460 million deal last year.