By Dan Primack | Axios
Digital pharmacy provider Truepill has agreed to be acquired for $525 million by Ireland’s LetsGetChecked, Axios has learned from multiple sources.
The big picture: Truepill is a telehealth pioneer, but it’s no longer a unicorn.
- Only $25 million of the purchase is in cash, the remainder is in stock, although it includes another $200 million in possible earnouts tied to revenue milestones.
- Hayward, Calif.-based Truepill had raised over $370 million in VC funding, including at a $1.6 billion valuation in 2021, from firms like Optum, Optum Ventures, Oak HC/FT, and Initialized Capital.
- LetsGetChecked, itself a VC-backed company with Optum Ventures on the cap table, plans to raise around $150 million via a convertible note offering to help finance the deal.
“Business sellers should be cautious when an earn out is proposed as part of the deal price. It’s crucial that sellers actively participate in earn out negotiations and understand the fine print i.e., are the milestones achievable or stretch goals? How will the financials be run post-closing? What is the time frame for payment, and when is it paid? Etc.” -Shruti Gurudanti, director of corporate transactions at Rose Law Group
