Convergence and consolidation, mergers and acquisitions, it’s all happening in healthcare. The week kicks off with a variation on these themes: a double acquisition-merger starring employer wellness companies Virgin Pulse, the employer wellness arm of Richard Branson’s company Virgin Group, and RedBrick Health. Private equity firm Marlin Equity Partners announced it has acquired both and plans to merge them as part of a deal that’s expected to close by the end of the month, but the financial terms were not disclosed.
The combined companies will have a total of 3,300 customers in 190 countries, according to a Virgin Pulse news release. Michael Anderson, a managing director at Marlin Equity Partners, said in a separate announcement that the deal was designed to reduce fragmentation in healthcare, which sounds a little less convincing coming from a PE firm that would have to be more motivated by the financial opportunity than by the vexation of fragmentation.
“This is a multibillion-dollar market that is hungry for innovation, desperate for disruption and ripe for consolidation, and we are committed to doubling down on these two leaders to move this market forward and unlock the value of employee health and wellbeing,” Anderson said.
David Osborne, CEO of Virgin Pulse, will serve as CEO of the combined company, which will come under Virgin Pulse’s brand. The company’s headquarters in Providence, Rhode Island will become the main offices for the combined businesses. It will also hold onto RedBrick’s Minneapolis offices.
When Castlight acquired Jiff, part of the attraction was the marketplace Jiff had built. Similarly, Virgin Pulse and RedBrick’s assets are seen to fit together as well. Virgin has the mobile engagement tools and Redbrick is known for its large strategic partners. Their network includes support for mental health, financial wellbeing, sleep, nutrition, telemedicine, price transparency, and treatment decision support among other assets.
RedBrick Health, which got its start in 2006, had seven investors including Kleiner Perkins Caulfield and Byers, Deerfield Management, Waterline Ventures, Highland Capital Partners, Volition Capital and others.
Virgin Pulse, which used to be called Virgin Health Miles, has raised $92 million to date, mostly from a Series B round in 2015.
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