NeueHealth, Inc. (“NeueHealth” or the “Company”) (NYSE: NEUE),
the value-driven healthcare company, today announced that it has
entered into a definitive merger agreement pursuant to which the
Company will be acquired by an affiliate of New Enterprise
Associates (“NEA”) at an enterprise value of approximately $1.3
billion. Upon completion of the transaction, NeueHealth will become
a privately held company with the flexibility and resources to
continue advancing its value-driven, consumer-centric care
model.
Under the terms of the merger agreement, holders of NeueHealth
common stock (other than shares that will be rolled over and
certain excluded shares) will receive $7.33 per share in cash,
which represents a premium of approximately 70% over the closing
price of NeueHealth common stock on December 23, 2024. Certain
stockholders of NeueHeath, including NEA and 12 existing NeueHealth
investors (which collectively hold all of the outstanding shares of
NeueHealth preferred stock), have entered into rollover agreements
pursuant to which such stockholders will continue their investments
by exchanging their shares of NeueHealth common stock and/or
preferred stock for newly issued equity interests in the privately
held company, and the Company’s existing secured loan facility with
Hercules Capital, Inc. will remain in place.
NeueHealth’s executive leadership team will continue in their
roles upon completion of the transaction and intends to roll over
100% of their equity interests for newly issued equity interests in
the privately held company.
“We are pleased to announce this transaction as we believe it
places NeueHealth in a strong position for continued growth while
maximizing value for all of NeueHealth’s public stockholders,” said
Mike Mikan, President and CEO of NeueHealth. “NEA has been a
longstanding strategic partner, and we look forward to continuing
to work together to build on NeueHealth’s success as a leader in
value-based care.”
“We believe NeueHealth has built a differentiated model of care
that is uniquely positioned to drive value for consumers,
providers, and payors and we have confidence in the NeueHealth team
and their ability to continue to lead the Company,” said Mohamad
Makhzoumi, Co-CEO of NEA. “We have had a strong partnership with
NeueHealth since 2016 and share the Company’s commitment to making
high-quality healthcare accessible and affordable for all
Americans.”
Transaction Details
A special committee (the “Special Committee”) of the board of
directors of NeueHealth (the “Board”), composed entirely of
independent and disinterested directors and advised by its own
independent legal and financial advisors, unanimously recommended
that the Board approve the transaction and determined it was in the
best interests of the Company and its stockholders that are not
affiliated with NEA. Acting upon the recommendation of the Special
Committee, the Board subsequently unanimously approved the
transaction and determined to recommend that NeueHealth
stockholders vote to approve and adopt the merger agreement.
Certain NeueHealth stockholders have agreed to vote all of their
shares of NeueHealth common stock and/or preferred stock to approve
and adopt the merger agreement, subject to certain conditions.
The merger is subject to approval by NeueHealth’s stockholders
and other customary closing conditions, including receipt of
certain regulatory approvals. NEA intends to finance the
transaction with fully committed equity financing, and the
transaction is not subject to any financing condition. Upon
completion of the transaction, NeueHealth’s common stock will no
longer be publicly traded or listed on any public market.
The merger agreement includes a 30-day “go-shop” period that
will expire at 12:01 AM New York City time on January 23, 2025,
which permits the Special Committee and its financial advisors to
solicit and consider alternative acquisition proposals. There can
be no assurance that this process will result in a superior
proposal, and NeueHealth does not intend to disclose developments
with respect to the “go-shop” process unless and until it
determines such disclosure is appropriate or is otherwise
required.
Lincoln International, LLC is acting as financial advisor, and
Richards, Layton & Finger, P.A. is acting as legal counsel, to
the Special Committee. Simpson Thacher & Bartlett LLP is acting
as legal counsel to NeueHealth.
Latham and Watkins LLP is acting as legal counsel to NEA, with
Sidley Austin LLP acting as insurance regulatory counsel to
NEA.
More information regarding the key terms will be included in a
current report on Form 8-K to be filed by NeueHealth with the
Securities and Exchange Commission (the “SEC”).
Important Information and Where to Find It
In connection with the transaction, the Company will file with
the SEC a proxy statement on Schedule 14A (the “Proxy Statement”),
the definitive version of which will be sent or provided to Company
stockholders. The Company, affiliates of the Company and affiliates
of NEA intend to jointly file a transaction statement on Schedule
13E-3 (the "Schedule 13E-3") with the SEC. The Company may also
file other documents with the SEC regarding the transaction. This
release is not a substitute for the Proxy Statement, the Schedule
13E-3 or any other document which the Company may file with the
SEC. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY
STATEMENT, THE SCHEDULE 13E-3 AND ANY OTHER RELEVANT DOCUMENTS THAT
ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS
OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY
BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE
COMPANY OR THE TRANSACTION BECAUSE THESE DOCUMENTS CONTAIN OR WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTION AND RELATED
MATTERS. Investors and security holders may obtain free copies of
the Proxy Statement, the Schedule 13E-3 and other documents that
are filed or will be filed with the SEC by the Company, when such
documents become available, through the website maintained by the
SEC at www.sec.gov or through the Company's website at
https://investors.neuehealth.com/home/default.aspx.
The transaction will be implemented solely pursuant to the
Agreement and Plan of Merger, dated as of December 23, 2024 (the
“merger agreement”), among the Company, NH Holdings 2025, Inc. and
NH Holdings Acquisition 2025, Inc., which contains the full terms
and conditions of the transaction.
Participants in the Solicitation
The Company and certain of its directors, executive officers and
employees may be deemed to be participants in the solicitation of
proxies from stockholders of the Company in connection with the
proposed transaction. Information regarding the Company’s directors
and executive officers is available in the definitive proxy
statement for the 2024 annual meeting of stockholders of the
Company, which was filed by the Company with the SEC on April 1,
2024 (the “Annual Meeting Proxy Statement”), and will be available
in the Proxy Statement. Please refer to the sections captioned
“Executive Compensation,” “Director Compensation,” and “Security
Ownership of Certain Beneficial Owners and Management” in the
Annual Meeting Proxy Statement. Holdings of the Company’s
securities by certain of the Company’s employees, and any changes
in the holdings of the Company’s securities by the Company’s
directors or executive officers from the amounts described in the
Annual Meeting Proxy Statement, have been reflected in the
following Statements of Change in Ownership on Form 4 filed with
the SEC: Form 4, filed by George Lawrence Mikan III on May 6, 2024;
Form 4, filed by Jay Matushak on May 6, 2024; Form 4, filed Tomas
Orozco on May 6, 2024; Form 4, filed by Jeffery Michael Craig on
May 6, 2024; Form 4, filed by Jeffrey J. Scherman on May 6, 2024;
Form 4, filed by Jay Matushak on May 13, 2024; Form 4, filed by
Jeffrey J. Scherman on May 13, 2024; Form 4, filed by Kedrick D.
Adkins, Jr. on May 14, 2024; Form 4, filed by Andrew M. Slavitt on
May 14, 2024; Form 4, filed by Linda Gooden on May 14, 2024; Form
4, filed by Mohamad Makhzoumi on May 14, 2024; Form 4, filed by
Robert J. Sheehy on May 14, 2024; Form 4, filed by Matthew G.
Manders on May 14, 2024; Form 4, filed by Stephen Kraus on May 14,
2024; Form 4, filed by Manuel Kadre on May 14, 2024; Form 4, filed
by Jeffrey R. Immelt on May 14, 2024; Form 4, filed by Mohamad
Makhzoumi on October 3, 2024; Form 4, filed by Jay Matushak on
October 8, 2024; Form 4, filed by George Lawrence Mikan III on
December 18, 2024. Other information regarding the participants in
the proxy solicitation and a description of their direct and
indirect interests, by security holdings or otherwise, will be
contained in the Proxy Statement and other relevant materials to be
filed with the SEC in connection with the proposed transaction when
they become available. Free copies of the Proxy Statement and such
other materials may be obtained as described in the preceding
paragraph.
About NeueHealth
NeueHealth is a value-driven healthcare company grounded in the
belief that all health consumers are entitled to high-quality,
coordinated care. By uniquely aligning the interests of health
consumers, providers, and payors, NeueHealth helps to make
healthcare accessible and affordable to all populations across the
ACA Marketplace, Medicare, and Medicaid. NeueHealth delivers
high-quality clinical care to over 500,000 health consumers through
owned clinics and unique partnerships with over 3,000 affiliated
providers. We also enable independent providers and medical groups
to thrive in performance-based arrangements through a suite of
technology and services scaled centrally and deployed locally. We
believe our value-driven, consumer-centric care model can transform
the healthcare experience and maximize value across the healthcare
system. For more information, visit: www.neuehealth.com.
About NEA
New Enterprise Associates (NEA) is a global venture capital firm
focused on helping entrepreneurs build transformational businesses
across multiple stages, sectors and geographies. Founded in 1977,
NEA has more than $25 billion in assets under management as of June
30, 2024 and invests in technology and healthcare companies at all
stages in a company’s lifecycle, from seed stage through IPO. The
firm's long track record of investing includes more than 280
portfolio company IPOs and more than 465 mergers and acquisitions.
For more information, please visit www.nea.com.
Forward-Looking Statements
This release contains certain “forward-looking statements”
within the meaning of the U.S. Private Securities Litigation Reform
Act of 1995. Statements made in this release that are not
statements of historical fact, including statements about our
beliefs and expectations, are forward-looking statements and should
be evaluated as such. Forward-looking statements include
information concerning possible or assumed future results of
operations, including descriptions of our business plan and
strategies, and statements as to the expected timing, completion
and effects of the transaction. These statements often include
words such as “anticipate,” “expect,” “plan,” “believe,” “intend,”
“project,” “forecast,” “estimates,” “projections,” “outlook,”
“ensure,” and other similar expressions. These forward-looking
statements include any statements regarding our plans, expectations
and financial guidance. Such forward-looking statements are subject
to various risks, uncertainties and assumptions. Accordingly, there
are or will be important factors that could cause actual outcomes
or results to differ materially from those indicated in these
statements. Factors that might materially affect such
forward-looking statements include: the failure to complete the
transaction on the anticipated terms and within the anticipated
timeframe, including as a result of failure to obtain required
stockholder or regulatory approvals or to satisfy other closing
conditions; potential litigation relating to the transaction that
could be instituted against NEA, the Company or their respective
affiliates, directors, managers, officers or employees, and the
effects of any outcomes related thereto; potential adverse
reactions or changes to our business relationships or operating
results resulting from the announcement, pendency or completion of
the transaction; the risk that our stock price may decline
significantly if the transaction is not consummated; certain
restrictions during the pendency of the transaction that may impact
our ability to pursue certain business opportunities or strategic
transactions; costs associated with the transaction, which may be
significant; the occurrence of events, changes or other
circumstances that could give rise to the termination of the merger
agreement, including in circumstances requiring us to pay a
termination fee; our ability to continue as a going concern; our
ability to comply with the terms of our credit facilities or any
credit facility into which we enter in the future; our ability to
receive the remaining proceeds from the sale of our Medicare
Advantage business in California in a timely manner; our ability to
obtain any short or long term debt or equity financing needed to
operate our business; our ability to quickly and efficiently
complete the wind down of our remaining Individual and Family Plan
(“IFP”) and MA businesses, including by satisfying liabilities of
those businesses when due and payable; potential disruptions to our
business due to the transaction or due to corporate restructuring
and any resulting headcount reduction; our ability to accurately
estimate and effectively manage the costs relating to changes in
our business offerings and models; a delay or inability to withdraw
regulated capital from our subsidiaries; a lack of acceptance or
slow adoption of our business model; our ability to retain existing
consumers and expand consumer enrollment; our and our care
partner’s abilities to obtain and accurately assess, code, and
report risk adjustment factor scores; our ability to contract with
care providers and arrange for the provision of quality care; our
ability to obtain claims information timely and accurately; the
impact of any pandemic or epidemic on our business and results of
operations; the risks associated with our reliance on third-party
providers to operate our business; the impact of modifications or
changes to the U.S. health insurance markets; our ability to manage
any growth of our business; our ability to operate, update or
implement our technology platform and other information technology
systems; our ability to retain key executives; our ability to
successfully pursue acquisitions, integrate acquired businesses,
and quickly and efficiently divest businesses as needed; the
occurrence of severe weather events, catastrophic health events,
natural or man-made disasters, and social and political conditions
or civil unrest; our ability to prevent and contain data security
incidents and the impact of data security incidents on our members,
patients, employees and financial results; our ability to comply
with requirements to maintain effective internal controls; our
ability to adapt to mitigate risks associated with our ACO
businesses, including any unanticipated market or regulatory
developments; and the other factors set forth under the heading
“Risk Factors” in the Company’s reports on Form 10-K, Form 10-Q,
and Form 8-K (including all amendments to those reports) and our
other filings with the SEC. Except as required by law, we undertake
no obligation to update publicly any forward-looking statements for
any reason after the date of this release to conform these
statements to actual results or changes in our expectations.
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Investor Contact: IR@neuehealth.com
Media Contact: media@neuehealth.com
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