Evolent Health to acquire New Century Health for up to $217M

 Evolent Health and New Century Health announced that they have entered into a definitive agreement for Evolent to acquire New Century Health's business for up to $217M. The combination of Evolent and New Century Health brings together two companies that support provider organizations and health plans with clinical management and operational capabilities. Evolent was founded in 2011 to support providers in moving to a population health model of care delivery and to manage performance-based payment arrangements. Founded in 2002 and headquartered in Massachusetts, New Century Health is a technology-enabled, specialty care management company focused primarily on cancer and cardiac care. Utilizing its proprietary technology platform, New Century Health brings together clinical capabilities, pharmacy management and physician engagement to assist its customers in managing the large specialties of cancer and cardiac care. New Century Health manages approximately 462,000 Medicare Advantage lives under performance-based arrangements and provides administrative services, or ASO, to several partner organizations. New Century Health serves 12 long-term operating partners across multiple states; these partners include at-risk provider organizations, as well as national and regional health plans. Together, the organizations will be able to offer comprehensive specialty care management services and technology across Medicare Advantage, Medicaid and commercial populations in support of both New Century Health and Evolent's clients. Upon closing this transaction, the organizations together will serve more than 3.5M lives across more than 40 long-term operating partners. The purchase price is up to $217M and consists of 3.1M shares of Evolent Class B common stock and $120M in cash at closing. The purchase price includes an earn-out of up to $20M, payable in cash and Evolent Class B common stock, tied to future new business activity. Shares to be issued in relation to the earn-out are limited to 1M shares with full payment expected to be made in Q1 of 2020. The shares at closing and in the earn-out will be issued in transactions exempt from registration under the Securities Act of 1933, as amended. Evolent expects the acquired business, on a standalone basis, to generate adjusted revenues and adjusted EBITDA of approximately $177M and $20M, respectively for the latest twelve months ended June 30, however, Evolent will consolidate the results of the acquired business only for the period subsequent to the close of the transaction. The companies expect the transaction to close within the next 120 days, subject to regulatory approvals and certain closing conditions set forth in the agreement.


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