Last week, when Healthways, one of Williamson County’s largest employers, announced that Sharecare, a private health care technology company, would buy its name, brand and one of its divisions; its previously bearish stock jumped.
Since news of the acquisition, Healthways has been in recovery after sliding for more than a year. Healthways (HWAY), which had a 2015 revenue of $742.2 million. but reported a $14.2 million loss in the first quarter of 2016, had been trading around 12 dollars per share. Its high in the past twelve months was $13.60 in late November.
Literally overnight, the news that it would sell its popular health division, its name and its brand to Sharecare, and restructure the rest of its company around network solutions, increased Healthways’ stock price by about a third.
Trading on HWAY closed last Wednesday at $12.18. The announcement that Sharecare was acquiring Healthways came that evening, and within an hour of opening on Thursday, HWAY stock hit its highest value since May of 2015. By 10 a.m. Thursday, it broke $16, and has stayed around there through the official acquisition on Sunday.
The stocks five-day high was $16.85 on Monday morning, and it closed on Tuesday at $16.64.
Sharecare agreed to give Healthways $30 million in stock in the deal, which so far seems to be wise for both parties. As part of the agreement, Healthways paid Sharecare $25 million to cover expected losses and give back up to $20 million of Sharecare stock to cover losses that exceed expectations.
Going forward, Healthways will focus on its network solutions business, including its three primary networks: SilverSneakers Fitness, Prime Fitness and Physical Medicine.
“Through our analysis, it was clear that we could create the most value for shareholders, customers and colleagues by focusing exclusively on, and investing in, our growing and profitable network solutions business, which is a more targeted population approach for our go forward business model,” Don Tramuto, Healthways CEO, wrote in a strategic assessment.
The assessment projected the company would have an annual revenue going forward of more than $500 million, with at least 20 percent margins.
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