Dario picks up Twill, strengthening mental health portfolio

DarioHealth has agreed to acquire digital care company Twill in an effort to create "one of the most comprehensive" digital offerings for chronic conditions. In addition to paying $10 million in cash for the firm, Dario will also issue about 10 million shares of common stock to Twill shareholders. 

Erez Raphael, chief executive at Dario, said the deal is an "incredible opportunity to bring together our complementary solutions and create an unrivalled platform for the next generation of consumer-centric digital health." 

According to the company, the transaction is projected to almost double its pro forma revenue for 2023 and increase gross margins 80% to 85% by 2025. Dario reported sales of $16.7 million in the first nine months of 2023, while Twill's revenues totalled $13.8 million. The acquisition is expected to help Dario reach nearly 30% in annualised cost synergies within two years after the transaction closes. Dario has also priced a $22.4-million private placement to raise funding for general corporate purposes. 

Boosting profitability 

Dario's platform and suite of digital tools are driven by data analytics and one-on-one coaching to address a range of conditions, including diabetes, hypertension, weight management, musculoskeletal pain and behavioural health. Meanwhile, Twill, formerly known as Happify Health, has sold its digital mental health solutions directly to consumers for over 10 years. The companies' combined offering will allow Dario to deliver outcomes across broad populations, with improved navigation capabilities to help connect members with the appropriate tools.

The partners hope the deal will accelerate their entry into the market and drive greater sales opportunities, with a chance to boost revenue per customer by cross-selling into both existing customer bases, "which has almost no overlap."

Twill's CEO Tomer Ben-Kiki will assume the role of chief operating officer at Dario, while Twill co-founder Ofer Leidner will join as an advisor to the commercial team.

For related analysis, see Spotlight On: By weaving in Twill, has DarioHealth sewn up the competition?