Privia Health Acquires Evolent's ACO Business for $100M, Expanding Value-Based Care Footprint

Privia Health, a leading physician enablement company, has announced the acquisition of Evolent Health's accountable care organization (ACO) business, Evolent Care Partners, for $100 million in cash. The deal, which is expected to close in the fourth quarter, marks a significant expansion of Privia's value-based care network and reinforces its position in the rapidly evolving healthcare landscape.

Strategic Expansion and Financial Impact

The acquisition will add more than 120,000 lives to Privia's value-based care arrangements, bringing the company's total attributed lives to 1.5 million across both new and existing states. This expansion includes participants in the Medicare Shared Savings Program (MSSP), various commercial programs, and Medicare Advantage.

Privia Health CEO Shawn Morris stated, "This acquisition aligns perfectly with our strategy to increase our shared savings in Medicare's largest value-based program while also expanding our technology and services platform to a new group of affiliated physicians."

The deal includes a potential additional $13 million contingent on the ACO's performance in the MSSP program in 2025. Privia expects the transaction to positively contribute to its adjusted earnings next year.

Impact on Value-Based Care Performance

Analysts have highlighted the potential for Privia to improve the performance of Evolent Care Partners' ACO within the MSSP. In 2024, Evolent Care Partners achieved a shared savings rate of 5.9%, which, while respectable, falls short of Privia's impressive 9.3% savings rate across its ACOs.

Ryan Langston, an analyst at TD Cowen, noted, "We see potential for [Evolent Care Partners] to generate additional earnings through [Privia] improving MSSP performance over time."

Evolent Health's Strategic Shift

For Evolent Health, the sale of its ACO business represents a strategic move to refocus on its core specialty care management services. The company plans to use the proceeds from the deal to pay down debt and streamline its operations.

Seth Blackley, CEO of Evolent Health, commented, "This transaction allows us to concentrate our resources on our high-growth specialty care management solutions while providing Evolent Care Partners and its affiliated physicians with an excellent partner in Privia Health."