Inovalon To Acquire Avalere To Drive Strategic Expansion Into Pharma/Life Sciences

Combination of data and analytical toolsets and expert data-driven advisory services significantly expands capabilities portfolio for existing clients and new prospects

Inovalon, a leading technology company providing advanced, cloud-based data analytics and data-driven intervention platforms to the healthcare industry, has entered into a definitive agreement to acquire Avalere Health, Inc., a leading provider of data-driven advisory services and business intelligence solutions to the pharmaceutical and life sciences industry.

The addition of Avalere, with its more than 200 pharma/life sciences clients, is expected to significantly expand Inovalon’s leadership in the broader healthcare marketplace and enables the company to expand its industry leading capabilities into an expansive adjacent market. Avalere, a growing provider of data-driven advisory services that already serves 13 of the top 15 pharma companies, will operate as a subsidiary of Inovalon, enabling Inovalon the ability to offer a powerful combination of business intelligence, cloud-based analytics, and data-driven insights to the pharma/life sciences industry. Avalere’s CEO, Dan Mendelson, will join the executive leadership team of Inovalon where he will continue to lead the day-to-day operations of the core business of Avalere.

Key Highlights of the Transaction

• The purchase price is $140M, which is comprised of $135M of cash and $5M of restricted stock.
• Closing is expected to occur on or about Tuesday September 1, 2015, subject to the satisfaction of customary closing conditions and antitrust clearance.
• Avalere reported $47.1M of revenue in the calendar year ended December 31, 2014 and, given the expected timing of closing, the transaction is estimated to be mildly accretive in 2015, adding a penny or less of Non-GAAP diluted net income per share.
• The acquisition supports Inovalon’s strategic expansion into the pharma/life sciences market which, according to a 2013 International Data Corporation (IDC) report, represents a large and materially untapped total addressable market (TAM) of $30B+.
• The addition of Avalere’s 200+ analysts and highly experienced specific subject matter experts are seen as a strong expander of Inovalon’s scale.
• In addition to serving Fortune 500 pharma / life sciences companies and contract research organizations, Avalere serves managed care companies, provider organizations, and other healthcare-related organizations.
• The Avalere team will retain its globally recognized brand.

“Data is transforming healthcare, and life sciences companies in particular need better information and analytics to drive commercial and strategic decisions,” said Dan Mendelson, CEO of Avalere. “Our combination with Inovalon will enable us to bring unique data-based solutions to the market while expanding on our outstanding core products and services. This is an exciting time within the healthcare industry, our clients, and our companies.”

“The sea change taking place in our healthcare system from a volume-based and consumption-based healthcare model is impacting payors, providers, and the pharma/life sciences landscape alike,” said Keith Dunleavy, M.D., chief executive officer and chairman of the board of Inovalon. “Avalere’s deep industry experience, expertise, and relationships further strengthens and expands our capacity to drive meaningful and measurable impact through data-driven insights for not only several core areas of our existing client base, but rather excitingly, the very large pharma/life sciences industry.”

Supplemental Information
For more information regarding Inovalon’s acquisition of Avalere, including certain expected benefits of the proposed transaction, a corporate fact sheet on this acquisition had been posted in the Investors section of Inovalon’s website located at www.inovalon.com.

About Avalere
Avalere is a vibrant community of innovative thinkers dedicated to solving the challenges of the healthcare system. Working as a trusted thought-leader and partner to the senior leadership of more than 200 pharma/life sciences clients, as well as an extensive array of payor, provider, and research institutions, we deliver a comprehensive perspective, compelling substance, and creative solutions to help our clients make better business decisions. We partner with stakeholders from across healthcare to help improve care delivery through better data, insights, and strategies. With breakthrough business intelligence tools and programs, we empower business leaders to take action.

About Inovalon
Inovalon is a leading technology company that combines advanced cloud-based data analytics and data-driven intervention platforms to achieve meaningful insight and impact in clinical and quality outcomes, utilization, and financial performance across the healthcare landscape. Inovalon's unique achievement of value is delivered through the effective progression of Turning Data into Insight, and Insight into Action. Large proprietary datasets, advanced integration technologies, sophisticated predictive analytics, data-driven intervention platforms, and deep subject matter expertise deliver a seamless, end-to-end capability that brings the benefits of big data and large-scale analytics to the point of care. Driven by data, Inovalon uniquely identifies gaps in care, quality, data integrity, and financial performance – while bringing to bear the unique capabilities to resolve them. Providing technology that supports hundreds of healthcare organizations in 98.2% of U.S. counties and Puerto Rico, Inovalon's cloud-based analytical and data-driven intervention platforms are informed by data pertaining to more than 769,000 physicians, 261,000 clinical facilities, and more than 123 million Americans providing a powerful solution suite that drives high-value impact, improving quality and economics for health plans, ACOs, hospitals, physicians, consumers and pharma/life-sciences researchers.