Subsequent Events

12 Months Ended

Dec. 31, 2019

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Acquisition of Able Health, Inc.

On February 21, 2020, we completed a business combination by acquiring Able Health, Inc. (“Able Health”), a leading SaaS provider of quality and regulatory measurement tracking and reporting to healthcare providers and risk-bearing entities, pursuant to the Agreement and Plan of Reorganization (the “Acquisition Agreement”), dated February 13, 2020. We believe this acquisition will strengthen Health Catalyst’s existing Quality and Regulatory Measures capabilities.

Pursuant to the Acquisition Agreement, we acquired all of the equity interests in Able Health for preliminary consideration of approximately $19 million, consisting of approximately $15 million in cash and 110,662 shares of our common stock issued on the closing date at $30.11 per share. The final purchase price consideration will also include an estimate for contingent consideration of up to an additional 145,036 shares of our common stock if certain incremental billing targets for Able Health are met during an earn-out period that ends on December 31, 2020. The fair value estimate of contingent consideration is in the early stages of analysis. The purchase price is also subject to certain working capital adjustments, which are expected to be finalized within 90 days of the closing date.

Given the recent timing of the closing of this business combination, we are in the process of identifying and measuring the value of the assets acquired and liabilities assumed. We plan to disclose the preliminary purchase price allocation estimates and other related information in our Form 10-Q for the quarter ending March 31, 2020.

An additional 179,392 shares of our common stock were issued pursuant to the terms of the Acquisition Agreement and are a stock-based compensation arrangement subject to a Restriction Agreement. The vesting of those shares is subject to one year of continuous service by the applicable team members and shall vest on the one-year anniversary of the acquisition closing date. We expect to recognize $5.4 million in stock-based compensation related to these restricted shares over the service period.