Evolent prices upsized $170m secondary offering

Evolent Health (NYSE:EVH) today released pricing for an upcoming secondary offering round, increasing the number of shares it is looking to float from 7 million to 7.5 million, now looking to bring in approximately $168.8 million.

The company said it plans to offer 7.5 million shares of its Class I common stock at $22.50 per share, with a 30-day underwriters option for the purchase of up to 1.13 million additional shares. Evolent said it expects the offering to close Sept. 14.

Shares will be offered by UPMC, affiliates of TPG Global, The Advisory Board Company and Ptolemy Capital, according to a press release. Evolent said it will not receive any of the proceeds from the offering.

In July, Evolent Health said that it agreed to put up roughly $145 million to acquire value-based administration, population health and advisory services provider Valence Health.

The deal calls for Evolent, which took itself public in a $195.5 million offering last year, to pay $35 million in cash and another 5.84 million in EVH shares, which closed at $18.68 apiece yesterday (the stock was up 10.0% to $20.54 per share in mid-morning trading today as investors reacted to news of the buyout).

Another $50 million, or up to 3.9 million shares of EVH stock, is on the table as an earn-out option pegged to “future new business activity,” Evolent said. The Valence business is expected to boost revenues by $80 million to $85 million this year; the transaction is expected to close within 120 days, the company said. The buyout does not include Valence’s state insurance cooperative contracts, which are slated to be transferred to a separate entity owned by Valence’s shareholders.

 

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