Evolent Health Explores Sale, Garners Inbound Interest From Private Equity Firms

Evolent Health Inc EVH is reportedly up for sale.

What Happened: The Arlington, Virginia-based software provide initiated an auction process after receiving takeover inquiries from private equity firms and healthcare providers.

Among the potential suitors are private equity giants TPG Inc TPG, Clayton, Dubilier & Rice (CD&R), and KKR & Co. Inc. KKR. Notably, TPG was one of Evolent's early investors.

Reuters noted that health insurer Elevance Health Inc ELV has also expressed interest and may join forces with a private equity partner to pursue a deal.

Founded in 2011, Evolent offers software solutions to help healthcare providers and insurers transition from fee-for-service to value-based care models. The company partners with prominent industry players like Humana Inc. HUM.

Why It Matters: Evolent has seen financial challenges despite a 38% revenue increase in its latest quarter. The company struggled with lower billing rates from payer customers, leading to results below market expectations.

Its history of attracting acquisition interest includes a 2021 Bloomberg report that Walgreens Boots Alliance, Inc. WBA was considering a deal.

Activist investor Engaged Capital took a significant stake in Evolent in 2020 and pushed for changes to enhance shareholder value.

Price Action: EVH stock is up 0.62% at $32.30 during the premarket session at last check Friday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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