WASHINGTON, Aug. 4, 2021 /PRNewswire/ -- Evolent Health,
Inc. (NYSE: EVH) – Evolent Health, Inc. ("Evolent"), and WindRose
Health Investors ("WindRose") announced today that they have
entered into a definitive agreement for Evolent to acquire
WindRose's portfolio company Vital Decisions for $85 million, with an additional earn out of up to
$45 million. Vital Decisions will
report into Evolent's specialty management offering, New Century
Health, and will be consolidated into Evolent's Clinical Solutions
segment.
The combination of New Century Health and Vital Decisions brings
together two innovative companies that support payers and
risk-bearing providers in delivering high-value, lower-cost care to
their members through technology-enabled services and deep clinical
expertise. Founded in 2002, New Century Health is a specialty care
management company focused on driving improved outcomes in oncology
and cardiology through peer-led provider collaboration. Founded in
2006, and headquartered in New
Jersey, Vital Decisions is a leading provider of
technology-enabled advance care planning services, ensuring that
the care of individuals with serious illness aligns with their
values and changing preferences throughout every step of their
health journey and, in particular, as they approach the end of
life.
"Cancer and heart disease account for more than 50% of deaths in
the United States and drive a
substantial portion of health care services at the end of life. The
addition of Vital Decisions to New Century Health will help ensure
that the care plans for these and other individuals facing advanced
illness align with their core values and personal preferences,
adapting with patients as their needs and goals evolve," said New
Century Health Chief Executive Officer, Dan
McCarthy. "As one of the nation's leading providers of
advance care planning services, Vital Decisions empowers
individuals, helping them find their voice when it matters most. We
look forward to welcoming Vital Decisions employees and clients to
the Evolent and New Century Health families."
"We have found that up to 35% of costs in the last six months of
life are for services that are unwarranted or unwanted—decreasing
patient satisfaction and quality while increasing costs to the
system. Addressing this misalignment of treatment goals between
patients and providers requires multiple innovative solutions
coming together," said Vital Decisions CEO Leah Puccio. "This acquisition will help ensure
that the care plans created by our Vital specialists find their way
into the hands of the providers responsible for ensuring these
individuals receive the care they want as their illness progresses.
New Century Health has developed a robust provider engagement
platform and it's a privilege to combine capabilities so we can
continue improving health outcomes and quality of life for our
members, while reducing costs for our customers."
Vital Decisions Co-Founder and Executive Chairman Mitchell Daitz added, "From its inception, the
vision of Vital Decisions has been to facilitate higher levels of
alignment among patients, their family, and their providers
regarding the care that is delivered during an advanced
illness. Leveraging New Century Health's expertise in
provider relationship management will accelerate the organization's
progress towards that goal."
Strategic Rationale
The transaction is expected to
deepen capabilities of both organizations, allowing cross-sell, an
enhanced value proposition to partners and an opportunity to
increase the margin profile of the combined organization. In
addition, Vital Decisions is expected to accelerate New Century
Health's entry into the patient engagement area. Further, the
transaction is accretive on an EBITDA per share basis before any
synergies.
"We believe Vital Decisions is a strong strategic fit for
Evolent, as it adds patient engagement capabilities to New Century
Health that should deliver strong clinical and financial outcomes,
and presents two-way cross-sell opportunities," said Evolent Health
Chief Executive Officer Seth
Blackley. "We believe this transaction also unlocks patient
engagement and telehealth as levers for ensuring patients with
complex illness receive high-quality, coordinated care."
Transaction Details
Evolent is acquiring 100% of the
outstanding equity interests in Vital Decisions for an aggregate
purchase price of up to $130 million.
At closing and subject to certain adjustments, approximately
$85 million of the purchase price
will be paid and issued, consisting of 50% Evolent Class A common
stock and 50% cash. The remainder of the purchase price consists of
an earn-out of up to $45 million,
payable solely in cash or in a mix of cash and Evolent Class A
common stock at Evolent's discretion, tied to the achievement of
certain profitability metrics in the fourth quarter of 2022. The
earn-out payment, if earned, is expected to be made in the first
quarter of 2023. 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 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 later this year, subject to the expiration of the waiting
period under the Hart-Scott-Rodino Act (or, if applicable, approval
thereunder) and the satisfaction or waiver of certain other
customary closing conditions.
Advisors
Legal counsel to Vital Decisions was provided
by McDermott Will & Emery LLP.
Bass, Berry & Sims PLC is acting as legal counsel to
Evolent.
Conference Call and Webcast Details
Evolent will hold
a conference call to discuss its second quarter performance and the
details of the transaction this evening, August 4, 2021, at 6:00
p.m., Eastern Time. The conference call will be available
via live webcast on the Company's Investor Relations website at
http://ir.evolenthealth.com. To participate by telephone, dial
855.940.9467 or 412.317.6034 for international callers, and ask to
join the "Evolent Health call." Participants are advised to dial in
at least fifteen minutes prior to the call to register. The call
will be archived on the company's website for one week and will be
available beginning later this evening. Evolent Health invites all
interested parties to attend the conference call.
About Evolent Health
Evolent Health (NYSE: EVH)
delivers proven clinical and administrative solutions that improve
whole-person health while making health care simpler and more
affordable. Our solutions encompass total cost of care management,
specialty care management and administrative simplification.
Evolent serves a national base of leading payers and providers, is
the first company to receive the National Committee for Quality
Assurance's Population Health Program Accreditation, and is
consistently recognized as a top place to work in health care
nationally. Learn more about how Evolent is changing the way health
care is delivered by visiting evolenthealth.com.
About Vital Decisions
Headquartered in Edison, NJ, Vital Decisions ensures that the
care of individuals with serious illness or in a medical crisis
aligns with their values and wishes. Enabled by behavioral science
methodologies, proprietary analytics and clinical experts, Vital
Decisions provides collaborative decision making and advance care
planning support for all members of a health plan's population
through a suite of telehealth and digital solutions. The services
help individuals and their families think through, communicate and
document their preferences to ensure their care is aligned with
their wishes—now and in the future as their medical situation
changes. Vital Decisions' solutions include personalized
discussions with highly trained clinical specialists, education and
referrals to palliative care, hospice and other available services,
and online tools to document and share advance care preferences.
These services result in improved quality and high satisfaction
among individuals, their families and their doctors. For more
information visit www.vitaldecisions.net.
Forward Looking Statements: Cautionary
Language
Certain statements made in this release and in
other written or oral statements made by us or on our behalf are
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 ("PSLRA"). A
forward-looking statement is a statement that is not a historical
fact and, without limitation, includes any statement that may
predict, forecast, indicate or imply future results, performance or
achievements, and may contain words like: "believe", "anticipate",
"expect", "estimate", "aim", "predict", "potential", "continue",
"plan", "project", "will", "should", "shall", "may", "might" and
other words or phrases with similar meaning in connection with a
discussion of future operating or financial performance. In
particular, these include statements regarding the expected
consummation of the transactions and consideration to be paid in
connection therewith, and the financial performance of Vital
Decisions, future synergies and operating prospects, and New
Century Health's growth acceleration. We claim the protection
afforded by the safe harbor for forward-looking statements provided
by the PSLRA. These statements are only predictions based on our
current expectations and projections about future events.
Forward-looking statements involve risks and uncertainties that may
cause actual results, level of activity, performance or
achievements to differ materially from the results contained in the
forward-looking statements. Risks and uncertainties that may cause
actual results to vary materially, some of which are described
within the forward-looking statements, include, among others:
- Uncertainties related to the timing of the expiration of the
waiting period under the Hart-Scott-Rodino Act (or, if applicable,
approval thereunder);
- The ability of Evolent and Vital Decisions to satisfy the
closing conditions of the merger;
- The occurrence of any change that could give rise to the
termination of the merger agreement;
- Our ability to implement integration plans for the merger and
to recognize the anticipated growth and benefits of the
merger;
- The risks that the merger and the other transactions
contemplated by the merger agreement disrupt current plans and
operations and the potential difficulties in retention of any
members of senior management of Vital Decisions and any other key
employees that Evolent is interested in retaining after the closing
of the merger;
- The limitations placed on the ability of Evolent and Vital
Decisions to operate their respective businesses by the merger
agreement;
- The effect of the announcement of the merger on Evolent's and
Vital Decisions' business relationships, clients, suppliers, other
partners, standing with regulators, operating results and
businesses generally;
- The amount of any costs, fees, expenses, impairments and
charges related to the merger;
- The market price for Evolent common stock potentially being
affected, following the merger, by factors that historically have
not affected the market price for Evolent common stock;
- The structural change in the market for healthcare in
the United States;
- Consolidation in the healthcare industry;
- Competition which could limit our ability to maintain or expand
market share within our industry; and
- Uncertainty in the healthcare regulatory framework.
The risks included here are not exhaustive. You should carefully
consider the foregoing factors and the other risks and
uncertainties that affect the business of Evolent described in the
"Risk Factors" section of its Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q and other documents filed by either
of them from time to time with the SEC. Although we believe the
expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, level of activity,
performance or achievements. Moreover, we operate in a rapidly
changing and competitive environment. New risk factors emerge from
time to time, and it is not possible for management to predict all
such risk factors. Further, it is not possible to assess the effect
of all risk factors on our businesses or the extent to which any
factor, or combination of factors, may cause actual results to
differ materially from those contained in any forward-looking
statements. Given these risks and uncertainties, investors should
not place undue reliance on forward-looking statements as a
prediction of actual results. In addition, we disclaim any
obligation to update any forward-looking statements to reflect
events or circumstances that occur after the date of this
release.
Contacts:
Chelsea Griffin
Investor Relations
919.817.8045
cgriffin@evolenthealth.com
Dan Paladino
571.306.3470
Media Relations
DPaladino@evolenthealth.com
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SOURCE Evolent Health, Inc.