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.
HealthPocket's game-changing technology, for the first time, provides free, one-click access for consumers to review on-and off-exchange individual major medical, Medicare, employer-sponsored and ancillary health plans, ranked by price, by doctor or hospital provider, and even by their personal prescription drug needs. This unbiased, straightforward information empowers consumers to choose from the largest set of health insurance plans and make informed health plan decisions. HealthPocket's business model features selling highly targeted consumer referrals to health insurers and their agent distributors.
HealthPocket, a healthcare technology company founded in 2012 under the leadership of Bruce Telkamp and Dr. Sheldon Wang, two former senior executives of eHealth, Inc. offers the only technology available to provide consumers independent comparisons and ranking of all health plans available — all in one place and with an intuitive interface. Its website, HealthPocket.com aggregates vast amounts of government, non-profit and private data for the U.S. health insurance, Medicare and Medicaid markets, as well as healthcare provider, network and cost data.
The HealthPocket Research & Data division is a leading source of analysis on the current health insurance market and ongoing market changes following the Affordable Care Act. Its state-of-the-art reports have gained national press attention, including the Wall Street Journal, Bloomberg, USA Today, CNN, Forbes, Kaiser Health News, Huffington Post, and NPR.
"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."
Strategic Benefits of the Transaction
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.
HII will host a conference call and webcast on Tuesday July 15th at 8:30 a.m. Eastern Time. The toll-free dial-in number is 877-312-8797; the toll number is 678-8236; the passcode is 70127701. Please connect at least 15 minutes prior to the call to ensure adequate time for any software or slide download that may be required to join the webcast.
The recorded webcast of the conference call will be available at HII's website investor.hiiquote.com/events.cfm.
About Health Insurance Innovations, Inc.
Headquartered in Tampa, Florida, Health Insurance Innovations, Inc. creates customizable and affordable, high-quality health insurance products and supplemental services through partnerships with best-in-class carriers. We are an industry leader in the sale of short-term and limited medical insurance plans, which provide an economical alternative to Individual Major Medical plans. HII pioneered and engineered its cloud-based technology platform to provide broker distributors and consumers with real-time health insurance solutions, allowing them to tailor plans to fit consumers' budgets and needs in one click. Additional information about HII can be found at www.hiiquote.com.
About Health Pocket, LLC
Headquartered in Sunnyvale, California, HealthPocket, Inc. is a technology company that aggregates vast amounts of government, non-profit and private data to provide unbiased information and creates powerful tools for consumers to compare and rank health insurance plans. HealthPocket was co-founded by Bruce Telkamp and Dr. Sheldon Wang in May 2012, and was backed financially by Lightspeed Venture Partners and Silicon Valley Bank. For more information, visit www.healthpocket.com.
This press release contains "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements other than historical fact, and may include statements relating to goals, plans and projections regarding new markets, products, services, growth strategies, anticipated trends in our business and anticipated changes and developments in the United States health insurance system and laws.
Forward-looking statements are based on the Company's current assumptions, expectations and belief are generally identifiable by use of words "may," "might," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential" or "continue," or similar expressions and involve significant risks and uncertainties that could cause actual results, developments and business decisions to differ materially from those contemplated by these statements. These risks and uncertainties include, among other things, our ability to maintain relationships and develop new relationships with health insurance carriers and distributors, our ability to retain our members, the demand for our products, the amount of commissions paid to us or changes in health insurance plan pricing practices, competition, changes and developments in the United States health insurance system and laws, and HII's ability to adapt to them, the ability to maintain and enhance our name recognition, difficulties arising from acquisitions or other strategic transactions, and our ability to build the necessary infrastructure and processes to maintain effective controls over financial reporting. These and other risk factors that could cause actual results to differ materially from those expressed or implied in our forward-looking statements are discussed in HII's Annual Report on Form 10-K for the year ended December 31, 2013 and subsequent Quarterly Reports on Form 10-Q, all as filed with the Securities and Exchange Commission as well as other documents that may be filed by HII from time to time with the Securities and Exchange Commission.
Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. You should not rely on any forward-looking statement as representing our views in the future. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.
For more information, please contact: Health Insurance Innovations, Inc.: Mike Hershberger Senior VP of Business Development (877) 376 5831 ext. 313 firstname.lastname@example.org Investor Contact: Susan Noonan S.A. Noonan Communications, LLC (212) 966 3650 email@example.com Media Contact: Kevin Pchola Zeno Group (212) 299-8950 firstname.lastname@example.org