Dive Brief:
- Evolent Health, Inc. has inked a deal to acquire the majority of former rival Valence Health, Inc. for approximately $145 million, the companies announced Wednesday.
- The merger will allow the two consulting firms to combine their expertise in guiding healthcare entities through their transitions to value-based care.
- The one component of Valence not being acquired, its business consulting for the ACA's co-op health plans, will become a company called Cicerone Health Solutions which will be owned by Valence shareholders.
Dive Insight:
After the deal, which is expected to close within 120 days pending regulatory approval and closing conditions, the combined company will serve more than 1.8 million patients across its 23 long-term operating partners--or, as Modern Healthcare reported, 125 health system and insurer clients across 35 states. Notable clients include Indiana University Health in Indianapolis, MedStar Health in Columbia, MD, NorthShore University HealthSystem in Chicago, and Passport Health Plan in Louisville, KY.
The arrangement was unanimously approved by both companies' boards and will keep Evolent CEO Frank Williams at the help of the joint entity, as well as keep Evolent's board as-is.
Evolent is looking to see the acquisition help the company break even by 2017, and bring expertise specifically with systems operating Medicaid and pediatric health plans. The acquisition will give Evolent "scale and a very strong set of financial characteristics,” Williams told Modern Healthcare.