Competing companies in the patient engagement space, PatientPoint and Outcome Health, have combined to form a new health technology company.
Both companies are owned by private equity firms, and the deal creates the largest U.S. advertising network in doctors’ offices, according to people familiar with the matter, Bloomberg reported.
The new company, PatientPoint Health Technologies, is a platform company offering tech-enabled patient engagement solutions that create more effective doctor-patient interactions across the entire patient care journey, PatientPoint announced in a press release Tuesday.
Terms of the transaction were not disclosed.
The former competitors, both of which coordinate and manage the display of content on screens in doctors’ offices and other point-of-care settings, have a combined valuation of roughly $600 million, according to Bloomberg, which reported talks of a potential merger last fall.
The combined entity will be majority-owned by a group of investors including funds managed by private equity firms L Catterton and Littlejohn & Co, which had already been backers of PatientPoint and Outcome Health, respectively.
PatientPoint Health Technologies will be led by PatientPoint's current leadership team including Mike Collette as CEO, Linda Ruschau as chief client officer, Pat O'Brien as chief financial officer and Chris Martini as chief provider officer.
PatientPoint's engineering and information technology teams will also be augmented by Outcome Health tech executives Glenn Keighley and Sean Barden, the company said.
The combined company will help meet the tech-enabled patient engagement needs of nearly 150,000 unique healthcare providers and impact roughly 750 million patient visits each year, the company said.
"This timely, strategic transaction both underscores our commitment to growth, and to offering our high-value, tech-enabled patient engagement solutions to as many providers as possible to help them meet the demands of a rapidly evolving healthcare industry," said Collette in a statement.
"By leveraging the best talent and technology from both PatientPoint and Outcome Health, we will be well-positioned to expand our suite of innovative patient engagement solutions to deliver improved patient outcomes and a more personalized, relevant patient experience as well as enhanced scale and efficiency for our healthcare sponsors."
Outcome, formerly called ContextMedia, was one of Chicago’s high-flying startups, pulling in $500 million during its first round of funding in May 2017 and attracting high-profile investors like Goldman Sachs and Google’s parent company, Alphabet. The company was valued at $5.5 billion at the time.
The company installs TVs and tablets in physicians' offices and sells targeted ads to pharmaceutical companies.
Four years ago, Outcome faced allegations that it had defrauded advertisers, based on a report from The Wall Street Journal that the company inflated data to pharmaceutical companies to boost ad sales. The company was then sued by investors who wanted to get their nearly $500 million investment back, claiming the company provided investors with fraudulent data and financial reports.
In 2019, the digital advertising company agreed to pay $70 million to resolve a criminal fraud investigation in Illinois. Outcome admitted that from 2012 to 2017 former executives and employees of the company fraudulently sold ads to clients, the Department of Justice (DOJ) said. According to the DOJ, the fraud scheme targeted the company's clients, lenders and investors.
Collette praised Outcome CEO Matt McNally and Chief Operating Officer Nandini Ramani for leading the company's "incredible turnaround and rebuilding client trust." McNally joined Outcome in 2018.
"We have great respect for the substantial provider network the Outcome Health team has built as well as the compelling solutions they have developed to enrich the patient's point-of-care experience," Collette said.
The new platform company plans to leverage a combination of organic growth and M&A to continue to grow its provider base and to expand the suite of tech-enabled patient engagement solutions it can offer its provider customers.
"Every key healthcare stakeholder wins with our unique business model: Patients achieve improved health outcomes and an enhanced patient experience, healthcare providers receive innovative, high-value patient engagement solutions at no cost or low cost, and healthcare sponsors that financially support our programs receive forecast-altering sales growth at a compelling ROI," Collette said.