After being courted several bidders, athenahealth has been sold to Veritas Capital and Evergreen Coast Capital for approximately $5.7 billion.
Athenahealth is a hospital and ambulatory services company that offers medical record, revenue cycle, patient engagement, care coordination and population health services. The company canceled its upcoming third-quarter earnings call with investors in the transaction’s announcement. Veritas Capital and Evergreen Capital, a subsidiary of Elliott Management, are private equity firms. Evergreen will retain a minority investment stake in the company.
Athenahealth has been the target of several takeover bids throughout the second half of 2018, following the departure of its former CEO Jonathan Bush, who admitted to domestic violence against his former wife.
Veritas and Evergreen plan to join athenahealth with Virence Health, the value-based care division of GE Healthcare that was purchased by Veritas Capital for more than $1 billion earlier this year. The combined entity will operate under the athenahealth brand and will be a privately-held information technology company headquartered in Watertown, Massachusetts. Virence Chairman and CEO Bob Segert will lead the company.
"After a thorough strategic review process, we have decided to enter this agreement with Veritas, which we believe maximizes value for our shareholders and accelerates our goal to transform healthcare," Jeff Immelt, executive chairman of athenahealth, said in a statement. "Combining with Virence will create new opportunities for collaboration and growth. Operating as a private company with Veritas's ownership and support will provide athenahealth with increased flexibility to achieve our purpose of unleashing our collective potential to transform healthcare."
The deal had been previously reported this spring, with an acquisition bid from Elliott at $160 per share. The definitive agreement is $135 per share of athenahealth stock, still above the stock price of about $120 per share prior to the deal announcement. The price is approximately a 12 percent premium, according to the announcement. Elliott Management announced a 9 percent stake in athenahealth on May 17, 2017.
The deal is expected to close in the first three months of 2019, subject to approvals by athenahealth shareholders and closing conditions and regulatory approvals. Athenahealth’s board of directors has already approved the merger agreement.