When Teladoc acquired Livongo in October 2020, did they overpay for the acquisition? Justify. A combination of a leading company in virtual care (Teladoc) and chronic disease management solutions (Livongo) presented possibilities for significant revenue growth and increased shareholder value. However, some analysts believed that Teladoc may have overpaid to acquire Livongo, especially because Livongo had never reported a GAAP profit. One analyst stated, The Livongo purchase could signal that Teladoc is fearful that its growth will normalize once the impact of the pandemic fades. The acquisition price paid by Teladoc was $13,938 million, consisting of $401 million of cash, assumption of notes payable of $555.4 million, and issuance of 60.4 million shares of Teladoc's common stock valued at $12,981.6 million. Table 2 presents the summarized balance sheet of Livongo immediately before the acquisition and the fair value of its assets and liabilities on the date of acquisition (October 30, 2020).

Table 2: Livongo Balance Sheet (Summarized) (Amounts in Thousands)