| Item 1.01 |
Entry Into a Material Definitive Agreement. |
Purchase Agreement
On August 18, 2025, Evolent Health, Inc. (the “Company” or “we”) entered into a purchase agreement (the “Purchase Agreement”) with Oppenheimer & Co. Inc., as representative of the several initial purchasers listed therein (collectively, the “Purchasers”), relating to the issuance and sale of $145.0 million aggregate principal amount of its 4.50% convertible senior notes due 2031 (the “notes”) in a private placement (the “Private Placement”) to persons reasonably believed to be qualified institutional buyers within the meaning of Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to an exemption from the registration requirements of the Securities Act afforded by Section 4(a)(2) of the Securities Act. The Company granted the Purchasers an option to purchase up to an additional $21.75 million aggregate principal amount of notes, which the Purchasers exercised in full on August 19, 2025. The closing of the Private Placement of the notes occurred on August 21, 2025 and a total of $166.75 million aggregate principal amount of notes were issued at an issue price of 100.00% of par for net proceeds of approximately $161.2 million, after deducting fees and estimated expenses. On August 21, 2025, using proceeds from the Private Placement plus available liquidity, the Company repurchased approximately $167.4 million aggregate principal amount of its 1.50% convertible senior notes due 2025 for approximately $167.6 million in cash in note repurchases entered into concurrently with the pricing of the Private Placement. The Company also repurchased approximately $40.0 million of shares of the Company’s Class A common stock concurrently with the Private Placement in privately negotiated transactions effected with or through one of the Purchasers or its affiliate at a purchase price per share equal to the last reported sale price of the Company’s Class A common stock on August 18, 2025.
The Purchase Agreement contains customary representations, warranties and agreements of the Company and customary indemnification rights.
The foregoing description of the Purchase Agreement is qualified in its entirety by reference to the full text of the Purchase Agreement, a copy of which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
Indenture
The notes were issued under an Indenture (the “Indenture”) dated as of August 21, 2025 between the Company and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”).
Pursuant to the terms of the Indenture, interest on the notes is payable semiannually in arrears on February 15 and August 15 of each year, beginning on February 15, 2026, at a rate equal to 4.50% per annum. The notes will mature on August 15, 2031, unless earlier repurchased, redeemed or converted in accordance with their terms prior to such date.
The notes will be convertible, upon satisfaction of certain conditions, at an initial conversion rate of 73.9098 shares of the Company’s Class A common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of approximately $13.53 per share of the Company’s Class A common stock. The initial conversion price represents a premium of approximately 50.0% over the closing price of the Company’s Class A common stock on the New York Stock Exchange on August 18, 2025. In the aggregate, the notes are initially convertible into 18,486,688 shares of the Company’s Class A common stock (including the maximum number of any shares issuable by the Company upon a conversion in connection with a make-whole fundamental change or a notice of termination of conversion rights as described in the Indenture). The conversion rate may be adjusted under certain
