Privia Health Group, Inc. (NASDAQ:PRVA) on Tuesday agreed to acquire an Accountable Care Organization (ACO) business from Evolent Health, Inc. (NYSE:EVH).
Privia Health will pay $100 million in cash at closing and up to an additional $13 million, subject to final Medicare Shared Savings Program (MSSP) performance for 2025.
The transaction is expected to close in the fourth quarter of 2025 and is expected to positively contribute to Adjusted EBITDA in 2026.
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The ACO business cares for over 120,000 attributed lives through the MSSP, as well as various commercial and Medicare Advantage programs.
With this transaction, Privia Health will now serve approximately 1.5 million attributed lives in value-based care (VBC) arrangements across commercial, Medicare, Medicare Advantage and Medicaid.
Evolent Health will finance the transaction with cash on its balance sheet.
The transaction increases VBC attributed lives in existing Privia states, adds lives in new states, and also offers a compelling synergy opportunity for the ACO-participating providers to join Privia’s Medical Groups for a full suite of services and technology platform.
Evolent reaffirmed its third-quarter 2025 guidance, projecting revenue of $460-$480 million, slightly below the consensus of $473.75 million, and adjusted EBITDA of $34-$42 million.
Before factoring in this transaction, Evolent reaffirmed its full-year 2025 outlook, projecting revenue of $1.85-$1.88 billion, slightly below the consensus of $1.88 billion, and adjusted EBITDA of $140-$165 million.
William Blair analysts highlighted the strategic value of the deal for Privia. “The transaction will expand Privia Health’s VBC attributed lives in existing states, add lives in several new states, and provide a compelling synergy opportunity for Evolent’s ACO-participating providers to join Privia’s core Medical Groups for a full suite of services and technology solutions,” they wrote.
Analyst Ryan Daniels noted that approximately 80,000 of the acquired lives are MSSP participants, “where Privia has proved to be an industry leader in cost and quality performance,” underscoring the potential for the company to leverage its operational expertise.
Price Action: EVH stock was trading higher by 12.60% to $9.45, and PRVA stock was up 1.15% at last check Wednesday.
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