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Evolent Health completes Valence Health acquisition

Evolent HealthInc. completed its acquisition of Valence Health for $219.4 million, net ofcertain closing adjustments.

The consideration is based on the Oct. 3 closing price ofEvolent's class A common shares on the NYSE,and consists of 7.05 million of Evolent's classA common shares and $50.3 million in cash. The shares issued to Valencestockholders represent approximately 10.5% of Evolent's issued and outstandingclass A and B common shares after the merger.

The terms of the transaction were amended relative to theagreement announced at signing, and the closing merger considerationincorporates payments under the original earn-out related to a new contractValence Health signed with MDWise on Sept. 26 and also an adjusted mix of cashand stock to provide sufficient cash to fund the business that the sellers areretaining to serve state insurance cooperatives.

The transaction also includes additional earn-out potentialof up to $12.4 million, payable in Evolent class A common shares, tied to newbusiness activity contracted on or before Dec. 31. Shares to be issued inrelation to the earn-out are limited to 951,576 shares.

Evolent expects the acquired business, on a standalonebasis, to generate revenues of approximately $80 million to $85 million for theyear ending Dec. 31.