Evolent Health Inc (NYSE:EVH) is reportedly up for sale.

What Happened: The Arlington, Virginia-based software provide initiated an auction process after receiving takeover inquiries from private equity firms and healthcare providers.

Among the potential suitors are private equity giants TPG Inc (NASDAQ:TPG), Clayton, Dubilier & Rice (CD&R), and KKR & Co. Inc. (NYSE:KKR). Notably, TPG was one of Evolent's early investors.

Reuters noted that health insurer Elevance Health Inc (NYSE:ELV) has also expressed interest and may join forces with a private equity partner to pursue a deal.

Founded in 2011, Evolent offers software solutions to help healthcare providers and insurers transition from fee-for-service to value-based care models. The company partners with prominent industry players like Humana Inc. (NYSE:HUM).

Why It Matters: Evolent has seen financial challenges despite a 38% revenue increase in its latest quarter. The company struggled with lower billing rates from payer customers, leading to results below market expectations.

Its history of attracting acquisition interest includes a 2021 Bloomberg report that Walgreens Boots Alliance, Inc. (NASDAQ:WBA) was considering a deal.

Activist investor Engaged Capital took a significant stake in Evolent in 2020 and pushed for changes to enhance shareholder value.

Price Action: EVH stock is up 0.62% at $32.30 during the premarket session at last check Friday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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