Athenahealth’s $17 Billion Takeover Is the Latest Private Equity Megadeal

Athenahealth’s $17 Billion Takeover Is the Newest Non-public Fairness Megadeal

Athenahealth, a well being care software program firm, stated on Monday that it might be bought to the funding companies Hellman & Friedman and Bain Capital for $17 billion, making it one of many greatest leveraged buyouts in a 12 months stuffed with them.

It additionally opens a brand new chapter for Athenahealth, whose founder, a member of the Bush political household, was compelled out after accusations of home abuse and inappropriate office habits got here to mild throughout a takeover battle with the hedge fund Elliott Administration.

Athenahealth’s sale is the newest instance of personal fairness companies profiting from favorable circumstances, together with low rates of interest that permit them borrow cash cheaply, to strike large offers. (In June, Hellman & Friedman was a part of one other sizable well being care takeover, the $30 billion buyout of Medline Industries.) Globally, funding companies, that are sitting on practically $2 trillion in capital but to be deployed, spent a file $758 billion throughout greater than 1,500 buyouts within the first 9 months of the 12 months, in accordance with Dealogic.

That deal-making wave now contains the takeover of Athenahealth, which traces its roots to a expertise firm based by Jonathan Bush in 1997. It will definitely turned a supplier of affected person file and billing providers, with Mr. Bush — a nephew of President George H.W. Bush and cousin of President George W. Bush — as its telegenic chief.

However Mr. Bush got here below stress in 2017 from Elliott Administration, the multibillion-dollar activist hedge fund identified for its hard-nosed ways. Elliott had taken a stake and demanded price cuts and different adjustments, prompting the corporate to announce layoffs and, later, the appointment of the previous Basic Electrical chief govt Jeffrey R. Immelt as chairman.

Mr. Bush stepped down in June 2018 amid accusations of home abuse towards his ex-wife and inappropriate office habits.

Elliott, which had made a hostile takeover supply for Athenahealth in Could 2018, ended up co-owning the corporate. Veritas Capital and Evergreen Coast Capital, Elliott’s personal fairness arm, agreed to purchase it for $5.5 billion, and later mixed it with Virence Well being Applied sciences, which Veritas had assembled from components of G.E.’s well being care division.

Athenahealth now works with greater than 140,000 well being care suppliers in 50 states.

Jesse Cohn, the Elliott managing associate who oversaw the activism marketing campaign, stated: “Elliott is proud to have labored with Veritas to assist remodel Athenahealth, and we welcome Hellman & Friedman and Bain Capital as new stewards of this distinctive and essential well being care chief.”

“At this time marks a big milestone for Athenahealth,” stated Bob Segert, Athenahealth’s chairman and chief govt, who will proceed to run the corporate after the deal closes.

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