Healthways buys incentives company

Small deal adds promising software program to Franklin company's lineup

Email | Print By Geert De Lombaerde

Healthways has acquired a young Boston company that markets incentive programs to help people change their health behaviors.

Franklin-based Healthways paid $14.7 million in cash for HealthHonors, whose principals also are in line for various earn-out provisions. Healthways CEO Ben Leedle said the deal will be slightly dilutive to his company's fourth-quarter earnings, but not enough to warrant a tweak in its full-year guidance.

HealthHonors was founded in early 2006 and now employs about 10 people. The company's main product is a software program that determines the lowest incentive level that will generate behavior changes. 

“Just as Healthways has led the industry in applying behavior change science, now we will lead the market in offering scientifically based incentive programs,” Leedle said. “Integration of HealthHonors’ innovative incentive strategy will boost our overall engagement and adherence to clinical and behavioral regimens.”

Shares of Healthways (Ticker: HWAY) will start Wednesday trading at $15.92. Year to date, they've risen about 40 percent.