Evolent Health, Inc. (NYSE: EVH), a leading population health management company, announced the acquisition of Implantable Provider Group (IPG), a developer of technology and surgical cost containment management services for musculoskeletal conditions, for $375 million in cash plus additional contingent consideration of up to $87 million. This strategic move strengthens Evolent's value-based specialty care business and expands its reach in the rapidly growing musculoskeletal care market. Upon close the IPG team and platform will be integrated into New Century Health.
Payer Services EBITDA Multiples
With expected 2022 revenue and EBITDA of $140m and $25m, respectively, the upfront multiples work out to 2.7x revenue and 15x EBITDA. According to Evolent's SEC filings, total consideration was $461.7m including the fair value of contingent consideration, implying an EBITDA multiple of 18.5x including contingent consideration. The IPG transaction represents the highest payer services multiple in our database when the value of contingent consideration is included, and is still on the high of the range even when contingent consideration is excluded. With expected annual revenue growth of 20%+ and significant new cross sell opportunities, the premium multiple may be justified.
Other Payer Services Deals
Read Scope Research's take on other payer services M&A transactions:
About Scope Research
The Scope Research Healthcare M&A Valuation Database currently has financial details for 131 population health and payer services deals going back to 2010, 78 of which include reported EBITDA multiples. The population health / payer services data can be purchased individually, while our affordable annual subscriptions provide access to all of our healthcare M&A databases and segments, updated continuously.
Don't hesitate to reach out to Will Hamilton at will@scoperesearch.co with questions about your specific situation.