Talkspace Strikes $1.4 Billion Merger With Hudson Executive

Online therapy provider Talkspace has agreed to merge with Hudson Executive Investment Corp., the blank-check firm run by former JPMorgan Chase & Co. executive Doug Braunstein.

The deal is worth $1.4 billion and will provide Talkspace with $250 million for investing in growth, according to a statement Wednesday, confirming a report in Bloomberg News. Hudson is raising $300 million to support the deal from investors including Federated Hermes Kaufmann Funds, Jennison Associates and Woodline Partners LP.

The company will trade on the Nasdaq under the symbol TALK.

About 80% of behavioral health visits can be done remotely, Talkspace co-founder and Chief Executive Officer Oren Frank said in an interview. The pandemic underscores the importance of this type of care, he said.

“If we talk about behavioral health, it was very broken before Covid, the level of access and the quality of the outcomes were to be honest subpar,” he said. “We always thought that virtual care is a particularly good fit for behavioral health care even before Covid.”

He will continue to lead the company with Co-founder Roni Frank while Braunstein will become board chairman.

Hudson raised $414 million in an initial public offering last year. Discussions with Talkspace began in June, said Braunstein, Hudson managing partner, in an interview. Hudson has good chemistry with Talkspace, he said. Braunstein used to be JPMorgan’s chief financial officer.

Started in 2012, Talkspace has 46,000 active members, according to the statement. The company links patients with licensed therapists by video chat and text, allowing them to seek treatment from home.

It has raised capital from investors including Revolution Growth, Norwest Venture Partners, Qumra Capital, Spark Capital and Compound.

Hudson fell 4.3% to $11.02 at 1:16 p.m. Wednesday in New York, giving the blank-check company a market value of $570 million.

Takspace’s advisers on the deal were JPMorgan Chase & Co., Jefferies Financial Group Inc. and Latham & Watkins. Citigroup Inc. and Millbank advised Hudson.

©2021 Bloomberg L.P.

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