Fast-growing Valence Health to be acquired for $145 million

by James Risley
July 13, 2016

Arlington, Va.-based Evolent Health announced today plans to acquire Chicago health care consulting and technology firm Valence Health for about $145 million. The two companies will cover more than 1.8 million people when the deal closes later this year.

Valence, which was founded two decades ago, has raised nearly $50 million the past five years as it developed expertise in Medicaid and pediatric markets. Most recently, the company announced a $15 million funding round that was used in part to begin hiring 500 new employees at Valence’s Chicago headquarters.

Valence was also named as one of the nation’s fastest-growing companies last year, with 246 percent growth. The company has more than 900 employees total.

"By adding Valence Health's services to Evolent, we expect to strengthen our operational capabilities and expertise, expanding our ability to support provider organizations in delivering higher quality, lower cost care," said Evolent CEO Frank Williams in a press release.

Valence CEO R. Andrew Eckert (pictured above) said in a statement that the two companies are “culturally and operationally aligned” to provide health care providers a smooth transition to value-based care with help from emerging technology.

Evolent, founded in 2011, focuses on helping providers switch to a population health model of care.

“We expect the addition of Valence Health's talented team and their experience in value-based administration will advance our ability to drive results for a broader set of clients, providers and patients,” Williams said. “We are looking forward to welcoming Valence Health employees and clients to the Evolent team."

The $145 million purchase price is made up of $35 million in cash and 5.84 million Evolent shares. A $50 million earn-out tied to new business activity is also included in the deal, expected to close later this year. Evolent expects Valence to generate $80 to 85 million in revenue this year.  

Evolent stock rose 10 percent this morning on news of the deal.

Photo via Facebook. 
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