Evolent Health prices $145 million convertible notes to refinance debt

Evolent Health Inc. (NYSE: EVH) priced $145 million of 4.50% convertible senior notes due 2031, increasing the offering size from an initially planned $140 million. The company also granted initial purchasers a 30-day option to purchase up to an additional $21.75 million of notes.

The notes carry a 4.50% annual interest rate with semiannual payments beginning February 15, 2026, and mature August 15, 2031. The conversion rate is set at 73.9098 shares of Class A common stock per $1,000 principal amount, equivalent to a conversion price of approximately $13.53 per share. This represents a 50% premium over the closing price of $9.02 per share on August 18, 2025.

Evolent plans to use approximately $100.2 million of net proceeds, plus available liquidity, to repurchase approximately $167.4 million of its existing 1.50% convertible senior notes due 2025. The company will use an additional $40 million to repurchase 4.43 million shares of Class A common stock at $9.02 per share through privately negotiated transactions.

"This transaction helps Evolent avoid over $9 million of annual interest expense when compared to retiring the 2025 notes with our committed incremental credit facilities," said John Johnson, Chief Financial Officer.

The notes will be convertible at holders' option prior to maturity, subject to certain conditions. Evolent may terminate conversion rights starting August 20, 2026, under specific stock price thresholds. Net proceeds are estimated at $140.2 million after fees and expenses, or $161.2 million if the purchasers' option is exercised in full.

Settlement is expected August 21, 2025, subject to customary closing conditions. The notes are offered only to qualified institutional buyers under Rule 144A.

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