Health Catalyst, Inc. Announces $86M Merger Agreement with Upfront Healthcare

The following are the key insights extracted from the provided 8-K filing for Health Catalyst, Inc. dated January 10, 2025:

1. Material Definitive Agreement:

• Health Catalyst, Inc. entered into a Merger Agreement on January 10, 2025, with Traverse Merger Sub I, Inc., Traverse Merger Sub II, LLC, and Upfront Healthcare, Inc. The agreement stipulates a two-step merger process where:
• • Merger Sub I will merge with Upfront, making Upfront a wholly owned subsidiary.
  • The surviving entity from this merger will subsequently merge into Merger Sub II.

2. Financial Consideration:

• The total consideration for the merger is approximately $86 million, net of cash on hand, which includes:
• • $41.5 million in cash.
  • 5,753,814 shares of newly issued Health Catalyst common stock.
• An additional potential earn-out of approximately $33.4 million is contingent upon meeting performance targets set for December 31, 2026. The earn-out will consist of 37.5% cash and 62.5% shares of common stock.

3. Conditions and Timeline:

• The closing of the merger is subject to customary conditions, including stockholder approvals and regulatory approvals. The expected closing date is during the quarter ending March 31, 2025.

4. Share Valuation:

• The shares to be issued as part of the consideration will be valued based on the average trading price of the common stock on the Nasdaq over a specified period prior to the announcement.

5. Termination Rights:

• The Merger Agreement includes standard termination rights, allowing either party to terminate under specified circumstances, such as failure to close by February 25, 2025, or significant adverse changes affecting Upfront.

6. Regulatory Compliance:

• The issuance of shares will comply with private offering exemptions under the Securities Act, indicating that this transaction is not being conducted as a public offering.

7. Press Release and Conference Presentation:

• On January 13, 2025, Health Catalyst issued a press release regarding the merger and published its presentation at the J.P. Morgan 2025 Healthcare Conference, which includes preliminary estimated results for 2024 and forward-looking statements.

8. Forward-Looking Statements:

• The filing contains forward-looking statements about the anticipated completion of the merger and the company's performance, with a caution that actual results may differ due to various risks and uncertainties.

These points encapsulate the critical elements of the merger agreement and the implications for Health Catalyst, Inc. as detailed in the 8-K filing.