Privia Health Expands Value-Based Care Footprint with $100M Acquisition of Evolent Health's ACO Business

Privia Health Group, a physician enablement company, has announced plans to acquire Evolent Health's accountable care organization (ACO) business for $100 million in cash. The deal, expected to close by the end of 2025, will significantly expand Privia's value-based care (VBC) presence across the United States.

Acquisition Details and Strategic Implications

The acquisition of Evolent Care Partners will add more than 120,000 attributed lives to Privia Health's portfolio, bringing its total VBC-attributed lives to approximately 1.5 million across commercial, Medicare, Medicare Advantage (MA), and Medicaid programs. This move will expand Privia's footprint to 11 additional states, increasing its presence from 15 states plus the District of Columbia to a total of 26 states.

Sam Starbuck, Senior Vice President and President of Privia Care Partners at Privia Health, stated, "The addition of Evolent Health's ACO business to our existing national network of ACOs reaffirms Privia Health's ability to replicate our highly differentiated and flexible operating model with new provider partners across the U.S."

The deal includes a potential additional payment of up to $13 million, subject to final Medicare Shared Savings Program (MSSP) performance for 2025. Privia anticipates that the acquisition will positively contribute to adjusted EBITDA in 2026, adding approximately $10 million in adjusted run-rate EBITDA.

Impact on Evolent Health and Industry Dynamics

For Evolent Health, a company specializing in software solutions for providers and insurers transitioning to value-based care, this divestiture allows for a sharper focus on its core specialty condition management business. Seth Blackley, co-founder and CEO of Evolent Health, explained, "This strategic divestiture will allow us to focus on our core specialty business while accelerating our path to reducing leverage and improving cash flow."

Evolent plans to use the proceeds to repay borrowings on its senior credit facility, which is expected to improve annual cash flow by more than $7 million. The company has reiterated its financial outlook for the third quarter and full year of 2025, projecting revenue between $1.85 billion and $1.88 billion for the year.

Market Analysis and Expert Opinions

Industry analysts view the deal favorably for both companies. William Blair analyst Ryan Daniels estimates that of the 120,000 attributed lives Privia will gain, approximately 80,000 are MSSP lives, an area where Privia has demonstrated leadership in cost and quality performance.

David Larsen, Managing Director and Digital Health Analyst at BTIG, noted, "This deal makes sense in our view, mainly because Privia is in the business of primary care and managing risk for those members regardless of the services they receive, and Evolent is in the business of managing specialty care, in particular oncology, cardiology, MSK and other more intense disease states."

The transaction underscores the ongoing consolidation and specialization trends in the healthcare industry, particularly in the value-based care sector. As companies like Privia Health and Evolent Health refine their focus, the landscape of accountable care organizations and specialty care management continues to evolve, promising potential improvements in patient care and cost efficiency across the U.S. healthcare system.