Virgin Pulse plans to merge with HealthComp in $3B deal

Virgin Pulse, a mobile-first employee wellness and engagement company, announced its intent to merge with HealthComp, a benefits and analytics platform, to create a technology and data-enabled healthcare service for employers. 

The reported $3 billion deal, first reported in the Wall Street Journal, will form a combined entity that utilizes technology and an AI-enabled data platform to deliver health plan designs aimed at improving member health outcomes and lowering costs for members and employers. 

Through Virgin’s Homebase for Health platform, employers can access assets that integrate plan management, plan design, payment integrity, preventative care, health navigation and digital therapeutics. 

New Mountain Capital, Blackstone and Morgan Health, the healthcare arm of JP Morgan Chase, will back the combined entity. Marlin Equity Partners, which acquired Virgin Pulse in 2018, will also back the new organization. 

Chris Michalak, who has served as Virgin Pulse’s director and CEO since 2021, will be CEO of the combined entity, and the deal is expected to close in the fourth quarter of 2023, subject to regulatory approval. 

“This combination with HealthComp creates a new category in the health space that will change the way employers address the two-fold challenge of reducing costs and improving member outcomes. Our two companies have a shared mission to improve individual outcomes by engaging users early and often and making health and wellbeing more accessible, affordable, and personal for all,” Michalak said in a statement. 

“Together, we are addressing a problem that has plagued the industry for years – a misaligned, complex benefit structure that results in unmet needs and escalating costs. We are eliminating waste, friction, and preventable risks by putting members and their needs at the center of the ecosystem.”

THE LARGER TREND

Virgin Pulse announced it would integrate digital mental health company Headspace into its Homebase for Health platform in June. Through the partnership, Virgin’s members would have full access to Headspace within its AI-enabled health and wellbeing platform.

A month before, Virgin Pulse announced it expanded its Homebase for Health platform to include AI-enabled personalized workforce wellbeing tools that create a 360-degree view of populations, advance social determinants of health data and generate millions of insights each minute. 

Virgin said the database allows it to find a member’s data doppelganger, a virtual representation of the member. It then fills in gaps about the member using data twinning to help the system prepare for and react to a member’s needs. 

Virgin Pulse has made several acquisitions in the past, including its purchase of consumer health engagement tool Welltok in 2021 and digital therapeutic Blue Mesa Health in 2020, a company best known for its diabetes prevention program Transform. 

In 2018, Virgin Pulse merged with RedBrick Health, a digital coaching and navigation platform, after Marlin Equity Partners acquired RedBrick and Virgin Pulse for an undisclosed sum.