Accolade Snaps Up PlushCare for $450M

Accolade, Inc. (ACCD) has completed the acquisition of PlushCare, a provider of virtual primary care and mental health treatment in a cash and stock deal valuing $450 million.

Accolade is a provider of personalized health and benefits solutions that dramatically improve the experience, outcome, and cost of healthcare for employers, health plans, and their members.

The acquisition of PlushCare increases the company’s total addressable market size to more than $200 billion and is expected to be accretive to Accolade’s growth by enabling new revenue opportunities.

Per the terms of the deal, the purchase consideration was to be funded in part by $40 million in cash and $340 million worth of the company’s common shares. PlushCare will also receive an additional $70 million worth of ACCD’s common shares subject to realizing certain predefined revenue milestones. (See Accolade stock analysis on TipRanks)

Rajeev Singh, Accolade’s CEO said, “The addition of PlushCare’ s virtual primary care to our personalized advocacy and navigation platform rounds out the superlative member experience and value we bring already to over nine million Americans. Within this framework, we’re adding primary care physicians into our frontline care teams to support members on every leg of their care journey and to be the trusted source for corporate benefits buyers for enabling the right healthcare for their organizations.”

Accolade plans to provide guidance for the combined company along with its Q1 FY22 financial results.

Recently, Needham analyst Ryan MacDonald reiterated a Buy rating to the stock and said, “Accolade’s established track record of driving higher member engagement and material cost savings represents a strong competitive differentiator for the company in an environment in which employers are inundated with digital health offerings.”

The analyst assigned a price target of $59 to the stock, which implies 12.3% upside potential to current levels.   Consensus among analysts is a Strong Buy based on 7 Buys and 1 Hold. The ACCD average analyst price target stands at $58.75 and implies upside potential of 11.9% to current levels. Shares have gained 76.8% over the past year.

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