Evolent Health To Buy IPG For $375 Mln Cash, Due At Close; Backs Outlook

Evolent Health, Inc. (EVH), a provider of clinical and administrative solutions, announced Wednesday that it has entered into a definitive agreement to acquire IPG, a provider of surgical cost management solutions.

IPG will be acquired from TPG Growth, the middle market and growth equity platform of alternative asset firm TPG, for $375 million in cash, due at close. In addition, contingent consideration of up to $87 million may be paid based on future performance milestones for IPG.

The transaction is expected to close during the third quarter of 2022 and is subject to customary closing conditions.

Following the deal closure, IPG team and platform will be integrated into New Century Health.

At closing, the IPG acquisition is expected to immediately enhance Evolent Health's adjusted EBITDA margin and cash flow profile.

The deal expands Evolent's specialty focus to include surgical cost management focusing on musculoskeletal conditions, adding to its specialty portfolio of oncology, cardiology, and end-of-life care planning.

For calendar year 2022, IPG standalone financials are expected to be revenue of $140 million, and adjusted EBITDA of $25 million or approximately 18% margin. Annual sales growth for IPG is expected to be 20%+.

Evolent expects to fund $250 million of the purchase price in cash, through a combination of $25 million cash on hand and proceeds from a new $225 million Five Year Senior Credit Facility provided by funds managed by the credit group of Ares Management.

The balance of the upfront consideration will be in the form of newly issued Evolent common shares.

Further, Evolent reaffirmed its outlook for the second quarter of 2022 and full year 2022 before the acquisition of IPG.

The company expects to provide updated full year guidance incorporating the acquisition on its second quarter, 2022 earnings report and conference call in early August, assuming the acquisition has closed by such time.

For comments and feedback contact: editorial@rttnews.com

Business News

Editors Pick
United Airlines and Archer Aviation Inc. announced plans to launch the first commercial electric air taxi route in Chicago, between O'Hare International Airport or ORD and Vertiport Chicago. As part of their urban air mobility or UAM network buildout, both companies will utilize Archer's electric vertical takeoff and landing or eVTOL aircraft in the new route. Fort Wayne, Indiana-based Perfection Bakeries D/B/A Aunt Millie's is recalling 8 ct. packages of Our Family White Hot Dog Buns citing the possible presence of undeclared sesame, a known allergen, the U.S. Food and Drug Administration said. The product comes in a printed plastic package marked with "Our Family Hot Dog Buns 8 ct." on the top and has a blue twist tie. Parsippany, New Jersey -based Ascend Laboratories LLC. is recalling Dabigatran Etcxilate capsules citing the detection of N-Nitrosodimethylamine or NDMA impurity, a probable human carcinogen, the U.S. Food and Drug Administration said. The product is used as an oral anticoagulant to lower the risk of stroke and blood clots.
Follow RTT