Health Insurance Innovations (HIIQ) has acquired direct-to-consumer insurance platform TogetherHealth in a cash-cum-stock deal in a move to re-enter the 65+ insurance market.
TogetherHealth connects individuals with US insurance carriers via consumer acquisition and engagement. On the other hand, HIIQ is a cloud-based technology platform which distributes health insurance, life insurance and supplemental plans.
The purchase consideration is made up of nearly $50m (£39.36m) in cash, issuance of 630,000 shares of HIIQ Class A common stock, and a five-year earn-out provision based on the future performance of the purchased business.
TogetherHealth CEO Robert Gregg said: “I’m excited about the synergies of our expertise in the over 65 market and HIIQ’s exceptional customer service and technology platform. We believe we can quickly leverage their resources to capitalize on this opportunity and continue to build our presence in this market.”
According to HIIQ, the acquisition will further enable it to tap on its scalable technology platform besides complementing its diverse customer-centric strategies. The transaction is also expected to build upon the company’s core mission of enabling consumer access to suitable health insurance coverage that matches their individual requirements.
HIIQ CEO and president Gavin Southwell said: “This transformative acquisition offers immediate scale for us in the large and growing over-65 insurance market. This segment of the market continues to benefit from the strong, multi-dimensional tailwinds of changing demographics, as over 10,000 Americans a day turn 65 and age into Medicare.
“TogetherHealth broadens our product offering, expands our market opportunity, and further diversifies our business, while significantly enhancing our consumer acquisition and engagement capabilities.”
Based in Florida, HIIQ helps in developing insurance products through its relationships with insurance firms. The company markets the products through its distribution network of third-party licensed insurance agents across the US, its call center network and also by using its online capability.
In another development, HIIQ signed a new $215m (£169.23m) credit agreement with a syndicate of banks. The company plans to use the net proceeds from the term loan to refinance part of its outstanding debt, fund the cash portion of the TogetherHealth acquisition, and for other corporate purposes.