Athenahealth to be acquired for $5.7B by Veritas Capital and Elliott subsidiary

athenahealth to be acquired for $5.7B by Veritas Capital and Elliott subsidiary

Athenahealth is about to be acquired by Veritas Capital and Evergreen Coast Capital for $5.7 billion.

Collectively, Veritas and Evergreen, the personal fairness subsidiary of Elliott Administration, the hedge fund that has actively urged athenahealth to promote for greater than a 12 months, can pay $135 per share for the cloud IT firm – about 12 p.c greater than its valuation on the shut of buying and selling this previous Friday.

WHY IT MATTERSThe deal brings to a decision a matter that has been a lot mentioned over the previous two years. Elliott, which had a 9 p.c possession place within the agency, had pressured the Watertown, Massachusetts-based firm to promote since 2017, claiming it might to higher with operational efficiencies that may maximize shareholder worth.

Upon completion of the acquisition, which has been unanimously permitted by the athenahealth board and is anticipated to shut within the first quarter of 2019, Veritas and Evergreen plan to mix athenahealth with Virence Well being, the previous value-based care group of GE Healthcare that was purchased by Veritas this years.

Collectively the businesses, working beneath the athenahealth model, will proceed growing applied sciences to assist supplier clients succeed within the period of accountable care, officers stated.

The corporate will likely be led by Virence Chairman and CEO Bob Segert, in addition to executives from each corporations. (Upon the deal’s completion, Virence’s Workforce Administration enterprise will change into a separate Veritas portfolio firm beneath the API Healthcare model.)

THE LARGER TRENDSince 2017, athenahealth has undergone a serious restructuring, employed ex-GE chief exec Jeff Immelt as chairman, seen its founding CEO step down amid allegations of previous abuse, laid off lots of of employees and offered its company jet.

Veritas has been in shopping for mode for well being IT firms just lately, together with its Verscend Applied sciences subsidiary’s aquisition of Cotiviti  this summer time.

ON THE RECORDJeff Immelt, govt chairman of athenahealth, stated the deal “maximizes worth for our shareholders and accelerates our purpose to rework healthcare.” By becoming a member of with Virence, athenahealth “will create new alternatives for collaboration and progress,” he added. “Working as a non-public firm with Veritas’s possession and help will present athenahealth with elevated flexibility to realize our objective of unleashing our collective potential to rework healthcare.”

“We’re excited by the chance to accomplice with athenahealth, one of many largest and most linked supplier networks within the nation, to drive outcomes that matter probably the most to our clients,” added Virence CEO Bob Segert. “athenahealth and Virence have complementary portfolios and highly-talented individuals, and this mixture expands our depth and attain throughout the continuum of care. I am trying ahead to combining our mission-driven cultures to create a good stronger healthcare IT firm.”

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