- Evolent Health Inc (NYSE:EVH) has agreed to acquire IPG, a technology and services company providing surgical management solutions for musculoskeletal conditions, from TPG Growth.
- The deal value includes $375 million plus additional consideration of up to $87 million. It is expected to close in Q3 of 2022.
- Upon close, the IPG team and platform will be integrated into New Century Health.
- 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.
- Evolent Health expects the transaction to be immediately accretive to adjusted EBITDA margins and cash flow.
- It expects meaningful revenue cross-sell synergy opportunity with health plan and risk-bearing provider customers.
- For 2022, IPG standalone revenues are expected to be $140 million, with an adjusted EBITDA of $25 million (approximately 18% margin) and annual sales growth of over 20%.
- Evolent will 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 Ares Management.
- Evolent ended the March quarter with a cash balance of $210.2 million.
- Price Action: EVH shares closed at $30.88 on Tuesday.
