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WASHINGTON - Evolent Health, Inc. (NYSE:EVH), whose shares have declined over 70% in the past year, announced Tuesday it has agreed to sell its value-based primary care business, Evolent Care Partners (ECP), to Privia Health Group, Inc. (Nasdaq:PRVA) for up to $113 million in cash. According to InvestingPro data, the company currently maintains a "Fair" financial health score, with analysts setting price targets ranging from $9 to $20.
The transaction includes $100 million payable at closing, with the remaining balance due in Fall 2026 based on final Medicare Shared Savings Program performance for 2025. The deal is expected to close during the fourth quarter of 2025.
ECP partners with more than 1,000 physicians nationwide to serve over 120,000 members in the Medicare Shared Savings Program.
Evolent plans to use the proceeds to prepay borrowings on its senior credit facility, which the company expects will improve its annual cash flow by more than $7 million. The company estimates the sold assets currently generate approximately $10 million in adjusted EBITDA, while the reduction in interest expense from debt prepayment will be approximately $10 million. With a current market capitalization of $974 million and trading below its InvestingPro Fair Value, this strategic move could help strengthen the company’s financial position.
"This strategic divestiture will allow us to focus on our core specialty business while accelerating our path to reducing leverage and improving cash flow," said Seth Blackley, Evolent’s Co-Founder and Chief Executive Officer, in a press release statement. While the company is not currently profitable, InvestingPro analysis indicates that net income is expected to grow this year, with analysts projecting a return to profitability.
Evolent reiterated its third-quarter 2025 outlook for revenue between $460 million and $480 million and adjusted EBITDA between $34 million and $42 million. The company also maintained its full-year 2025 guidance for revenue of $1.85-1.88 billion and adjusted EBITDA of $140-165 million, before accounting for the transaction’s effects.
Lazard served as financial advisor to Evolent, with Bass, Berry & Sims PLC providing legal counsel for the transaction.
In other recent news, Privia Health Group announced it will acquire Evolent Health’s Accountable Care Organization (ACO) business for $100 million in cash, with an additional performance-based payment of up to $13 million. This acquisition will expand Privia’s network by over 120,000 attributed lives through various Medicare and commercial programs. Evolent Health has been active in the financial markets, pricing a $145 million convertible notes offering at 4.50%, an increase from the initially planned $140 million. The company has also completed a $175 million exchange of its Series A Convertible Preferred Stock for a Second Lien Term Loan, extending debt maturities.
Piper Sandler and KeyBanc have both reiterated their Overweight ratings on Evolent Health, with price targets of $18.00 and $20.00 respectively. Piper Sandler’s reaffirmation followed investor meetings where Evolent Health discussed its revised outlook for 2025 and infrastructure investments. KeyBanc’s rating came after Evolent’s refinancing activities, highlighting the company’s strategic financial maneuvers. These developments indicate ongoing investor interest and strategic financial adjustments by Evolent Health.
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