Evolent Health entered into a definitive agreement to acquire IPG, a technology and services company providing surgical management solutions for musculoskeletal conditions, from TPG Growth, the middle-market and growth equity platform of alternative asset firm TPG, for $375 million plus additional contingent consideration of up to $87 million. Upon close, the IPG team and platform will be integrated into New Century Health.
The transaction is expected to close during Q3/22 and is subject to customary closing conditions. Evolent Health expects to fund $250 million of the purchase price in cash through a combination of $25 million in cash on hand and proceeds from a new five-year, $225 million senior credit facility provided by funds managed by the credit group of Ares Management.
“Today’s announcement represents an important step in Evolent’s journey to become a national leader in value-based specialty care solutions,” Seth Blackley, CEO and co-founder of Evolent Health, said. “The acquisition of IPG will expand Evolent’s specialty portfolio, add new customers and increase our commercial insurance revenue mix. IPG is a leader in surgical cost management solutions with a focus on musculoskeletal cost and quality and adds unique clinical value and an enhanced financial profile to support our mission for our patients, providers, payers and shareholders.”
“At closing, the IPG acquisition is expected to immediately enhance our adjusted EBITDA margin and cash flow profile and is consistent with our objective of efficiently allocating capital to drive long-term value creation,” John Johnson, CFO of Evolent Health, said. “IPG will add valuable relationships with national and regional commercial health plans across the country, as well as hundreds of partnerships with ambulatory surgery centers nationally.”
“On behalf of IPG, we are excited to become part of a leading value-based specialty care solutions company,” Vince Coppola, CEO of IPG, said. “We look forward to working closely with the Evolent team to further accelerate our growth and innovation. This partnership creates significant opportunities for our business, our clients and our team.”
