Sword Health to Acquire Headspace in All-Cash Deal

The notice of material change filed with the Massachusetts Health Policy Commission states that OrangeDot, Headspace's parent company, will merge with a temporary entity and become a wholly owned subsidiary of Sword Health. 

Digital physical therapy company Sword Health is set to acquire digital mental health platform Headspace in an all-cash transaction, with the proposed deal expected to take effect on September 14, according to a regulatory filing by Headspace's parent company.

The notice of material change filed with the Massachusetts Health Policy Commission states that OrangeDot, Headspace's parent company, will merge with a temporary entity and become a wholly owned subsidiary of Sword Health. The filing did not disclose the transaction value, although Axios reported that the deal could be valued between $200 million and $300 million.

The proposed acquisition represents a sharp decline from Headspace's valuation following its 2021 merger with Ginger. The combined company was valued at approximately $3 billion at the time.

Headspace had raised about $321 million from investors, while Sword Health had raised just under $500 million, according to Crunchbase. Sword Health's $40 million funding round last year valued the company at approximately $4 billion.

Headspace provides behavioral health services through its consumer platform and enterprise contracts with employers and health plans. Its offerings include mindfulness and wellness tools, as well as virtual care delivered by licensed therapists and psychiatrists. Headspace and its affiliated medical practices have 598 employees, including 418 full-time workers.

Sword Health, founded in 2015, initially focused on digital musculoskeletal care and has expanded into additional healthcare segments. In 2025, the company launched Mind, an AI-powered mental health platform, as part of its expansion into behavioral health.

Headspace said in the filing that its existing services are expected to continue without interruption following the transaction. The company also said it expects to maintain its virtual service offerings, nationwide reach, and relationships with customers and payers.

Integration planning is underway, with the combined company anticipating possible reductions in corporate roles where functions overlap. The filing said any workforce reductions are expected to be limited to corporate functions and are not expected to affect patient care, customer or payer relationships, or clinical service availability.

Both companies had also submitted required regulatory reviews to the Federal Trade Commission and officials in Oregon and Minnesota through July.

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