DarioHealth (Nasdaq:DRIO) announced today that it acquired digital-led care leader Twill and priced a $22.4 million private placement.
New York-based DarioHealth says the acquisition enables it to create a comprehensive digital platform for chronic conditions. This offering would span a wide spectrum of health and wellbeing needs, from emotional health to chronic conditions. The company highlights the scale, with three major national health plans, multiple Fortune 100 employers and several major pharmaceutical companies as customers.
DarioHealth paid $10 million in cash and agreed to issue approximately 10 million shares of common stock in the acquisition. Those shares come in the form of pre-funded warrants for the benefits of Twill’s debt holders and equity holders. The warrants vest in four equal amounts at 270 days, 360 days, 540 days and 720 days after the deal closes.
According to a news release, DarioHealth expects the acquisition to nearly double its pro format 2023 revenue. It expects accelerated market penetration and greater sales opportunities, too. The company anticipates the immediate realization of cost synergies as well.
DarioHealth plans to leverage Twill’s innovation in wellbeing and navigation to enhance its own end-to-end member journey. The combined solution will be able to enroll and engage members across their care journeys to help deliver outcomes across broad populations.
“The Twill acquisition is an incredible opportunity to bring together our complementary solutions and create an unrivaled platform for the next generation of consumer-centric digital health,” said DarioHealth CEO Erez Raphael. “The addition of Twill instantly boosts revenue and margins, leveraging a robust SaaS-like model to fuel expected rapid growth and accelerating profitability. We are confident in our ability to integrate Twill and its employees and operations, as we have a track record of integrating previously acquired businesses.”
DarioHealth also announces private placement
Concurrent with the acquisition, the company priced a $22.4 million private placement of convertible private stock. DarioHealth agreed to issue shares of newly designated convertible preferred stock as well. It plans to sell each share of preferred stock at $1,000 per share, with conversion prices of $2.02 and $2.14.
The company also issued inducement grants of stock options to purchase nearly 3 million shares of common stock to employes of Twill. Those options have an exercise price of $2.55, equaling DarioHealth’s stock price on Feb. 15. They vest in eight quarterly installments over two years following the closing of the Twill acquisition.
As part of the inducement grants, DarioHealth issued options to purchase more than 1 million shares of stock to Tomer Ben-Kiki. This comes in connection with Ben-Kiki’s appointment as COO.
DarioHealth also plans to issue up to an equivalent of 1,766,508 shares, 733,562 in the form of restricted stock units and 1,032,946 in the form of warrants, each of which shall be subject to the approval of Dario’s stockholder, issuable to Twill’s board members other employees and consultants of Twill.
