Performant Financial To Withdraw Public Offerings Of Senior Notes & Common Stock

(RTTNews) - Performant Financial Corp. (PFMT) announced Friday that it has decided to withdraw its proposed public offerings of convertible senior notes and common stock. Proceeds of the financings were intended to fund the purchase price for the acquisition of Premier Healthcare Exchange Inc. or PHX.

Performant Chief Executive Officer Lisa Im stated, "We continue to believe that Premiere Healthcare Exchange is an exceptional company, the acquisition has very compelling merits, and fits within our strategy of growing in healthcare technology. However, we are not going forward with the previously announced capital raise at levels that are not in the best interests of our stockholders."

On Wednesday, Performant Financial had announced that it reached an agreement to acquire Premier Healthcare Exchange for $130 million. The transaction consideration consists of $108 million in cash, subject to certain adjustments contemplated by the merger agreement, and $22 million of Performant common stock to be issued to key PHX stockholders.

In addition to the upfront consideration, Performant agreed to pay PHX stockholders a cash payment of up to $19.1 million if PHX generates specified levels of revenue for the year ended December 31, 2015. These revenue targets represent meaningful revenue growth over PHX's 2014 pro forma revenues. If the targets are not met, no additional payments will be made.

Performant Financial also announced on Wednesday that it planned to offer, $80 million aggregate principal amount (or up to an aggregate of $92 million aggregate principal amount if the underwriters named below exercise their over-allotment option in full) of convertible senior notes due 2020 and $50 million of Performant common stock (or up to $57.5 million of common stock if the underwriters exercise their over-allotment option in full) in separate registered public offerings.