Fairness opinions › Managed Care › 2025

Performant Healthcare acquired by Machinify: fairness opinion by Truist Securities

Announced July 31, 2025 · One-step merger · All cash · DEFM14A filed September 10, 2025
Managed Care Payer Services Sponsor: New Mountain Capital
Enterprise value
$670M
EV / LTM EBITDA
43.2x
EBITDA $15.5M · 11% margin
EV / LTM revenue
4.60x
revenue $146M
DCF discount rate
12.3%–15.3%
Perpetuity growth

Deal terms

ConsiderationAll cash
Price per share$7.75
Premium—
Premium basis$3.63 closing price per Company Share on July 25, 2025
StructureOne-step merger
Termination fee$20.0M (3.0% of equity)
Reverse termination fee$40.0M
Go-shopNone
Outside date—
FilingDEFM14A · EDGAR index

Implied value per share by method vs. $7.75 offer

Selected companies — EV / 2025E Revenue $1.63 – $5.09
Selected companies — EV / 2025E Adjusted EBITDA $1.50 – $3.83
Precedent transactions — EV / LTM EBITDA (scaled targets; LTM ending May 31, 2025) $1.78 – $2.93
Precedent transactions — EV / LTM Revenue (scaling targets; LTM ending May 31, 2025) $1.94 – $3.27
Discounted cash flow $4.26 – $7.16
Historical Trading Prices (52-week range) $2.17 – $4.44

Ranges as disclosed in the banker’s summary of analyses; the red line marks the per-share consideration.

Opinion of Truist Securities to the target board

Delivered July 29, 2025 · Fee $23.7M ($22.7M contingent on closing), $1.0M on delivery of the opinion

Discounted cash flow assumptions

Discount rate12.3%–15.3%
BasisEstimate of Performant's weighted average cost of capital
Terminal valuePerpetuity growth
Perpetuity growth3.0%–5.0%
Exit multiple—
Projection period2025E-2030E
Projections usedCompany management Projections
Implied value per share$4.26–$7.16

Net present value of projected unlevered after-tax free cash flows.

Selected public companies (7)

Definitive Healthcare Corp. · Evolent Health, Inc. · Health Catalyst, Inc. · OptimizeRx Corp. · Progyny, Inc. · Talkspace, Inc. · TruBridge, Inc.

MultiplePeer lowPeer medianPeer highRange appliedImplied per share
EV / 2025E Revenue1.0x1.5x3.0x 1.0x–3.0x $1.63–$5.09
EV / 2025E Adjusted EBITDA8.2x11.3x21.1x 8.2x–21.1x $1.50–$3.83

Selected precedent transactions (7)

DateTargetAcquirerMultiple
2022-06Convey Health Solutions Holdings, Inc.TPG Capital15.7x EV / LTM EBITDA
2022-04Tivity Health, Inc.Stone Point Capital12.8x EV / LTM EBITDA
2020-12HMS Holdings Corp.Gainwell Technologies21.2x EV / LTM EBITDA
2018-06Cotiviti Holdings, Inc.Veritas Capital17.6x EV / LTM EBITDA
2025-01Accolade, Inc.Transcarent, Inc.1.4x EV / LTM Revenue
2024-06Sharecare, Inc.Atlaris, LLC1.2x EV / LTM Revenue
2022-01Castlight Health, Inc.Vera Whole Health Inc.2.1x EV / LTM Revenue
MultipleLowMedianHighRange appliedImplied per share
EV / LTM EBITDA (scaled targets; LTM ending May 31, 2025)12.8x16.6x21.2x 12.8x–21.2x $1.78–$2.93
EV / LTM Revenue (scaling targets; LTM ending May 31, 2025)1.2x1.4x2.1x 1.2x–2.1x $1.94–$3.27

Other analyses

AnalysisSummaryImplied per share
Historical Trading Prices (52-week range)For informational purposes only, not part of the opinion: 52-week high of $4.44 on July 10, 2025 and 52-week low of $2.17 on May 8, 2025, compared with $7.75 Merger Consideration and $3.63 closing price on July 25, 2025.$2.17–$4.44

Fee of approximately $23.7 million; $1.0 million payable upon delivery of opinion, remainder contingent on consummation of the Merger. Expense reimbursement and indemnity also provided.

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Management projections

Projection yearYear 1Year 2Year 3Year 4Year 5CAGR
Revenue$187M$223M$260M$290M$317M14.1%
Revenue growth28.5%19.4%16.4%11.5%9.5%
EBITDA$38.4M$60.4M$81.6M$94.7M$106M28.8%
EBITDA growth147.7%57.3%35.1%16.1%11.7%
EBITDA margin21%27%31%33%33%
Implied EV / EBITDA17.4x11.1x8.2x7.1x6.3x

Year-1 growth is against LTM at announcement ($146M revenue, $15.5M EBITDA); later years are year over year.

Management prepared standalone unaudited Projections for fiscal years 2025 through 2030, provided to the Board, Truist and potential bidders including Machinify. Revenue grows from $145.5 million in 2025 to $317.3 million in 2030, with Adjusted EBITDA rising from $15.5 million to $105.8 million; unlevered free cash flow goes from ($0.7) million in 2025 to $59.9 million in 2030, assuming a 25% tax rate plus NOL tax shields in 2025-2026. Truist was authorized and directed to use and rely upon the Projections for its analyses and opinion.

Process notes

Single fairness opinion from Truist Securities delivered orally on July 29, 2025 to the Performant board and confirmed in writing the same date. Competitive process involving Machinify, Party X and Party B; Machinify raised its bid to $7.75 per share on July 25, 2025 after being told its prior bid was undifferentiated, and agreed to reduce its proposed company termination fee from 4.0% to 3.0% of merger consideration and to accept a reverse termination fee. A Special Committee directed aspects of the process. Total funds needed to consummate the Merger estimated at approximately $715 million, funded through committed debt financing; the deal is not financing-conditioned. Company expense reimbursement capped at $3,000,000. Truist disclosed relationships with the New Mountain Group (Machinify sponsor) but identified no compensated engagements in the prior two years other than its current Performant engagement. Merger Consideration of $7.75 exceeded all of Truist's implied reference ranges.

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