Investor Consortium and NEA to Take NeueHealth Private
Investor Consortium, led by New Enterprise Associates (NEA), has announced that it has entered into a definitive merger agreement to acquire NeueHealth, Inc. (NYSE: NEUE), a value-driven healthcare company, for approximately $1.3 billion. This acquisition marks a major milestone for NeueHealth, which will transition to a privately held company following the completion of the transaction, enabling it to further advance its consumer-centric, value-driven care model with enhanced flexibility and resources.
Under the terms of the merger agreement, shareholders of NeueHealth common stock (except those with shares to be rolled over or excluded) will receive $7.33 per share in cash. This offer represents a 70% premium over the stock’s closing price on December 23, 2024. Key stockholders, including the Investor Consortium led by NEA and 12 other existing investors who hold all of the company’s preferred stock, have entered into rollover agreements. Through these agreements, the Investor Consortium and other stockholders will exchange their shares of common and/or preferred stock for newly issued equity in the privately held company. Additionally, the company’s existing secured loan facility with Hercules Capital, Inc. will remain intact after the transaction.
The current executive leadership team at NeueHealth will continue in their roles following the acquisition, with all of them committing to roll over 100% of their equity interests into the newly private company. This decision underscores their confidence in the company’s future growth and their belief in the ongoing success of its value-based care model.
Mike Mikan, President and CEO of NeueHealth, expressed his excitement about the deal, saying, “We are pleased to announce this transaction, as it positions NeueHealth for continued growth while maximizing value for all public stockholders. The partnership with the Investor Consortium, led by NEA, further strengthens our ability to scale and innovate in the value-based care space.”
NEA’s Co-CEO, Mohamad Makhzoumi, expressed confidence in NeueHealth’s innovative model of care, stating, “We believe NeueHealth has developed a differentiated model of care that uniquely drives value for consumers, providers, and payors. We have full confidence in the leadership team and their ability to continue guiding the company towards further success.” Makhzoumi also highlighted NEA’s long-term involvement with the company, having been a strategic partner since 2016, and emphasized their shared commitment to making high-quality healthcare accessible and affordable for all Americans.
The transaction has been reviewed and unanimously approved by a special committee of independent directors of NeueHealth’s board, who were advised by their own legal and financial advisors. The special committee determined that the merger is in the best interests of the company and its stockholders who are not affiliated with NEA. The board subsequently voted to recommend that NeueHealth’s stockholders approve the transaction and adopt the merger agreement.
Certain stockholders of NeueHealth have already agreed to vote in favor of the deal, subject to specific conditions. The merger is contingent on the approval of NeueHealth’s stockholders and the satisfaction of other customary closing conditions, including regulatory approvals. Notably, NEA intends to finance the entire deal with committed equity, with no financing contingencies attached to the transaction. Upon closing, NeueHealth’s common stock will be delisted from public markets.
The agreement also includes a 30-day “go-shop” period, allowing the special committee and its advisors to solicit alternative acquisition proposals until January 23, 2025. While the Investor Consortium is confident in the deal, there is no guarantee that a superior offer will emerge during this period, and NeueHealth has indicated it will only disclose developments related to the go-shop process if necessary.
The special committee has appointed Lincoln International, LLC as its financial advisor, while Richards, Layton & Finger, P.A. is acting as legal counsel. Simpson Thacher & Bartlett LLP represents NeueHealth in this transaction, and Latham & Watkins LLP is legal counsel for NEA, with Sidley Austin LLP advising on insurance regulatory matters.
This acquisition by the Investor Consortium, led by NEA, offers NeueHealth the opportunity to accelerate its mission of transforming the healthcare system, while providing its stockholders with significant immediate value. The deal strengthens the company’s position as a leader in value-based care and allows it to further invest in expanding its innovative care model.
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