TAMPA, Fla., July 14, 2014 (GLOBE NEWSWIRE) -- Health Insurance Innovations (HII) (Nasdaq:HIIQ) announced today that it completed the acquisition of privately-held, Silicon Valley based HealthPocket, Inc. for approximately $32 million in cash and stock.
The transaction is expected to bring significant competitive advantages, merging HII's industry-leading health plan development, virtual-administration and agent distribution of affordable health insurance plans with HealthPocket's powerful big-data-aggregation technology. HealthPocket analyzes and aggregates the largest repository (of any kind) of health insurance information and uses it to power its consumer website, HealthPocket.com.
Transaction Terms
Pursuant to the Agreement and Plan of Merger executed by the parties, the aggregate merger consideration paid by HII was approximately $30.8 million, consisting of ~$20.8 million in cash, ~788,000 shares of HII common stock, and options to purchase ~113,000 shares of HII common stock. As part of the transaction, HII also repaid HealthPocket's outstanding bank debt in the amount of ~$1.2 million. More details will be available in HII's Form 8-K related to this transaction.
"The incorporation of HealthPocket into Health Insurance Innovations fits with our growth strategy of continued innovation of unrivaled products and technology solutions within the insurance industry to further enhance our competitive advantage," said Mike Kosloske, CEO of Health Insurance Innovations. "HII has achieved a track record of rapid year-over-year growth since 2009. This transaction will significantly increase leads, drive sales and enable us to more swiftly expand into lucrative market adjacencies such as the $402B Medicare marketplace, the $35B ACA segment of individual major medical and the $220B employer-sponsored market, positioning the combined company for long-term leadership in our dynamic industry."
"Most Americans overpay for health insurance and the plans they choose often don't meet their unique needs. We founded HealthPocket to solve this national problem using new and highly scalable technology," stated Bruce Telkamp, CEO of HealthPocket. "Having the resources of HII behind us will allow us to further accelerate our technology investment and rapid growth in consumer utilization." Telkamp continued, "Both Sheldon Wang and I have known Mike Kosloske for over a decade, and we share Mike's deep passion for bringing much needed innovation to the health insurance industry."
"Aggregated comparison is what consumers want. Just look at what Amazon, Kayak, Edmunds and eBay have done by putting consumers in control and offering a vast amount of transparent options," said Kosloske. "Our research into adding this capability to our existing technology stack led us directly to HealthPocket, which is years ahead of the market. They know the industry from the inside-out and have built an unparalleled data and technology foundation that would take years to recreate. This was a key driver in this acquisition decision. HealthPocket is an ideal partner for continued growth and achieving our mission—to empower consumers with the latest technologies to research, purchase and manage their health insurance."
"We now have the ability to gain insights into the market that no individual carrier or online health insurance marketplace can. No one else has both the insights and the capability to transact business based on geography, demographics, psychographics and price points across multiple types of plans. We've proven that we know how to use those data points to create products distributors and consumers love—our top-line growth reflects this," said Kosloske.
