Evolent Health, Inc. Announces Pricing of Upsized Secondary Public Offering of Class A Common Stock

WASHINGTON, Sept. 8, 2016 /PRNewswire/ -- Evolent Health, Inc. (NYSE: EVH), a company providing an integrated value-based care platform to the nation's leading health systems and physician organizations ("Evolent Health"), today announced the pricing of a secondary public offering of 7,500,000 shares of its Class A common stock to be sold by UPMC, certain affiliates of TPG Global, LLC, The Advisory Board Company and Ptolemy Capital, LLC (together, the "Investor Stockholders") and certain management selling stockholders (the "Management Stockholders" and together with the Investor Stockholders, the "Selling Stockholders").  The shares of Class A common stock are being sold to the public at a price of $22.50 per share.  The offering was upsized from the previously announced offering size of 7,000,000 shares of Class A common stock.  The underwriters have a 30-day option period to purchase up to 1,125,000 additional shares of Class A common stock from the Investor Stockholders.  The offering is expected to close on September 14, 2016, subject to customary closing conditions.

J.P. Morgan Securities LLC and Goldman, Sachs & Co. are acting as joint book-running managers for the offering.  Wells Fargo Securities, LLC, William Blair & Company, L.L.C., SunTrust Robinson Humphrey, Inc., Allen & Company LLC, Cowen and Company, LLC and Leerink Partners LLC are acting as co-managers.

Evolent Health is not offering any shares of Class A common stock in the offering and will not receive any proceeds from the sale of shares of Class A common stock by the Selling Stockholders, including from any exercise by the underwriters of their option to purchase additional shares from the Investor Stockholders.

A registration statement (including a prospectus) relating to these securities has been filed with the U.S. Securities and Exchange Commission (the "SEC") and has become effective. Before you invest, you should read the prospectus in that registration statement and other documents filed with the SEC for more complete information about Evolent Health and this offering. You may obtain these documents free of charge by visiting EDGAR on the SEC's website at www.sec.gov.

The offering will be made only by means of a prospectus supplement and the accompanying prospectus. Copies of the prospectus supplement and accompanying prospectus related to the offering may be obtained from J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 or by telephone at 866.803.9204; or Goldman, Sachs & Co., Attention: Prospectus Department, 200 West Street, New York, NY 10282, or by telephone at (866) 471-2526, facsimile at (212) 902-9316, or email at [email protected].

This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of, these shares of Class A common stock in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.

About Evolent Health

Evolent Health partners with leading health systems to drive value-based care transformation. By providing clinical, analytical and financial capabilities, Evolent Health helps physicians and health systems achieve superior quality and cost results. Evolent Health's approach breaks down barriers, aligns incentives and powers a new model of care delivery resulting in meaningful alignment between providers, payers, physicians and patients.

Forward-Looking Statements – Cautionary Language

Certain statements made in this release and in other written or oral statements made by us or on our behalf are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA"). A forward-looking statement is a statement that is not a historical fact and, without limitation, includes any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain words like:  "believe," "anticipate," "expect," "estimate," "aim," "predict," "potential," "continue," "plan," "project," "will," "should," "shall," "may," "might" and other words or phrases with similar meaning in connection with a discussion of future operating or financial performance. In particular, these include statements relating to future actions, trends in our businesses, prospective services, future performance or financial results and the outcome of contingencies, such as legal proceedings. We claim the protection afforded by the safe harbor for forward-looking statements provided by the PSLRA.

These statements are only predictions based on our current expectations and projections about future events.  Forward-looking statements involve risks and uncertainties that may cause actual results, level of activity, performance or achievements to differ materially from the results contained in the forward-looking statements.  Risks and uncertainties that may cause actual results to vary materially, some of which are described within the forward-looking statements, include, among others:

• certain risks and uncertainties associated with the proposed acquisition of Valence Health, including:
  • revenues of Valence Health before and after the merger may be less than expected, and expected results of Evolent may not be impacted as anticipated;
  • uncertainties related to the timing of the receipt of required regulatory approvals for the merger;
  • the ability of Evolent and Valence Health to satisfy the closing conditions of the merger;
  • the occurrence of any change that could give rise to the termination of the merger agreement;
  • our ability to implement integration plans for the merger and to recognize the anticipated growth, benefits, cost savings and synergies of the merger;
  • the risks that the merger and the other transactions contemplated by the merger agreement disrupt current plans and operations and the potential difficulties in retention of any members of senior management of Valence Health and any other key employees that Evolent is interested in retaining after the closing of the merger;
  • the limitations placed on the ability of Evolent and Valence Health to operate their respective businesses by the merger agreement;
  • the effect of the announcement of the merger on Evolent's and Valence Health's business relationships, customers, suppliers, other partners, standing with regulators, operating results and businesses generally;
  • the amount of any costs, fees, expenses, impairments and charges related to the merger; and
  • the market price for our Class A common stock potentially being affected, following the merger, by factors that historically have not affected the market price for our Class A common stock;

• the structural change in the market for health care in the United States;
• our ability to effectively manage our growth;
• the significant portion of revenue we derive from our largest partners;
• our ability to offer new and innovative products and services;
• the growth and success of our partners, which is difficult to predict and is subject to factors outside of our control, including premium pricing reductions and the ability to control and, if necessary, reduce health care costs;
• our ability to attract new partners;
• our ability to recover the significant upfront costs in our partner relationships;
• our ability to estimate the size of our target market;
• our ability to maintain and enhance our reputation and brand recognition;
• consolidation in the health care industry;
• competition which could limit our ability to maintain or expand market share within our industry;
• our ability to partner with providers due to exclusivity provisions in our contracts;
• uncertainty in the health care regulatory framework;
• restrictions and penalties as a result of privacy and data protection laws;
• adequate protection of our intellectual property;
• any alleged infringement, misappropriation or violation of third-party proprietary rights;
• our use of "open source" software;
• our ability to protect the confidentiality of our trade secrets, know-how and other proprietary information;
• our reliance on third parties;
• our ability to use, disclose, de-identify or license data and to integrate third-party technologies;
• data loss or corruption due to failures or errors in our systems and service disruptions at our data centers;
• breaches or failures of our security measures;
• our reliance on Internet infrastructure, bandwidth providers, data center providers, other third parties and our own systems for providing services to our users;
• our dependency on our key personnel, and our ability to attract, hire, integrate and retain key personnel;

• risks related to future acquisition opportunities;
• the risk of potential future goodwill impairment on our results of operations;
• our future indebtedness and our ability to obtain additional financing;
• our ability to achieve profitability in the future;
• the requirements of being a public company;
• our adjusted results may not be representative of our future performance;
• the risk of potential future litigation;
• our ability to remediate the material weakness in our internal control over financial reporting;
• our holding company structure and dependence on distributions from Evolent Health LLC;
• our obligations to make payments to certain of our pre-IPO investors for certain tax benefits we may claim in the future;
• our ability to utilize benefits under the tax receivables agreement;
• our ability to realize all or a portion of the tax benefits that we currently expect to result from future exchanges of Class B common units of Evolent Health LLC for our Class A common stock, and to utilize certain tax attributes of Evolent Health Holdings and an affiliate of TPG;
• distributions that Evolent Health LLC will be required to make to us and to the other members of Evolent Health LLC;
• our obligations to make payments under the tax receivables agreement that may be accelerated or may exceed the tax benefits we realize;
• different interests among our pre-IPO investors, or between us and our pre-IPO investors;
• the terms of agreements between us and certain of our pre-IPO investors;
• our exemption from certain corporate governance requirements due to our status as a "controlled company" within the meaning of the New York Stock Exchange rules;
• the potential volatility of our Class A common stock price;
• the potential decline of our Class A common stock price if a substantial number of shares become available for sale or if a large number of Class B common units is exchanged for shares of Class A common stock;
• provisions in our amended and restated certificate of incorporation and amended and restated by-laws and provisions of Delaware law that discourage or prevent strategic transactions, including a takeover of us;
• the ability of certain of our investors to compete with us without restrictions;
• provisions in our certificate of incorporation which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees;
• our intention not to pay cash dividends on our Class A common stock; and
• our status as an "emerging growth company."

The risks included here are not exhaustive.  Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements.  Our 2015 Form 10-K and other documents filed with the SEC include additional factors that could affect our businesses and financial performance. Moreover, we operate in a rapidly changing and competitive environment. New risk factors emerge from time to time, and it is not possible for management to predict all such risk factors.

Further, it is not possible to assess the effect of all risk factors on our businesses or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. In addition, we disclaim any obligation to update any forward-looking statements to reflect events or circumstances that occur after the date of this report.

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SOURCE Evolent Health, Inc.