WASHINGTON, Sept. 12, 2018 /PRNewswire/ -- Evolent
Health, Inc. (NYSE: EVH) – Evolent Health, Inc. ("Evolent") and
NCIS Holdings, Inc. and New Century Investment, LLC ("New Century
Health") announced today that they have entered into a definitive
agreement for Evolent to acquire New Century Health's business for
up to $217 million.
The combination of Evolent and New Century Health brings
together two innovative 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 successfully 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 and complex specialties
of cancer and cardiac care. New Century Health manages
approximately 462,000 Medicare Advantage lives under
performance-based arrangements and provides administrative services
(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.
"Since day one, Evolent has been focused on delivering improved
and differentiated clinical outcomes for its provider partners; the
addition of New Century Health will enhance our clinical
capabilities and enable us to offer a more integrated set of MSO
services to our current provider partners," said Evolent Health
President Seth Blackley. "The
acquisition will also expand access to the payer market directly
and allow us to facilitate collaboration between payers and
providers. New Century Health has a proven, 15-year track record of
delivering significant cost savings through its specialty care
management model, deep clinical expertise and technology-driven
approach. We look forward to welcoming New Century Health employees
and clients to the Evolent family."
"We have consistently focused on aligning with organizations
that can help us enhance our capabilities and grow our clinical
impact and footprint, so I'm excited for New Century Health to take
this next step with Evolent Health and have the opportunity to
serve even more patients across the U.S.," said New Century Health
Chief Executive Officer Dr. Atul
Dhir. "We look forward to combining our proven specialty
care management methodologies and technology with Evolent's
market-leading value-based care platform to help our clients
effectively manage the high-cost specialties of oncology and
cardiology through a provider-led, best-in-class approach."
Strategic Rationale
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 3.5 million lives across more than 40
long-term operating partners.
"The addition of the New Century Health business is a strong
strategic fit for Evolent, as we work to deliver demonstrable
improvements in clinical and financial outcomes for providers and
payers," said Evolent Health Chief Executive Officer Frank Williams. "We believe this transaction
furthers our differentiation and position as the leader in a
high-growth market well into the future."
Transaction Details
The purchase price is up to
$217 million, and consists of 3.1
million shares of Evolent Class B common stock and $120 million in cash at closing. The purchase
price includes an earn-out of up to $20
million, 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 1.0 million shares with
full payment expected to be made in the first quarter 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 $177 million and
$20 million, respectively for the
Latest Twelve Months ended June 30,
2018; 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.
Advisors
New Century Health was advised by Leerink
Partners and legal counsel was provided by Winston & Strawn
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 details of the transaction today,
September 12, 2018, at 8:00 a.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 1.855.940.9467 and ask to join to the Evolent call.
Participants are advised to dial in at least 15 minutes prior to
the call to register. The call will be archived on the company's
website for 90 days and will be available beginning later this
evening. Evolent invites all interested parties to attend the
conference call.
![Evolent Health Logo (PRNewsfoto/Evolent Health) Evolent Health Logo (PRNewsfoto/Evolent Health)](https://mma.prnewswire.com/media/473042/Evolent_Health_Logo.jpg)
About Evolent Health
Evolent Health, Inc.'s Services
segment focuses on partnering with leading provider organizations
to achieve superior clinical and financial results in value-based
care. With a provider heritage and over 20 years of health plan
administration experience, Evolent operates in more than 30 U.S.
health care markets, actively managing care across Medicare,
Medicaid, commercial and self-funded adult and pediatric
populations. With the experience to drive change, Evolent
confidently stands by a commitment to achieve results. Our True
Health segment consists of a commercial health plan we operate in
New Mexico that focuses on small
and large businesses. For more information, visit
www.evolenthealth.com.
About New Century Health
New Century Health is the
nation's leading specialty care management company, with special
focus on Cancer and Cardiology patients. New Century Health
partners with specialist providers and health plans to provide them
with the clinical decision and population health management tools
to ensure that cancer and cardiology patients receive the highest
quality, most affordable care. To learn more about New Century
Health, please visit newcenturyhealth.com.
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 relating to future actions,
trends in our businesses, prospective services, future performance
or financial results and the outcome of contingencies, such as
legal proceedings. 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 receipt of required
regulatory approvals for the merger;
- The ability of Evolent and New Century Health 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 New Century Health 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 New
Century Health to operate their respective businesses by the merger
agreement;
- The effect of the announcement of the merger on Evolent's and
New Century Health's 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.
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SOURCE Evolent Health, Inc.