athenahealth agrees to a $5.7bn acquisition deal

Offering medical record, revenue cycle, patient engagement, care coordination, and population health services, health provider athenahealth has agreed to be acquired by Veritas Capital and Evergreen Coast Capital for $5.7bnm or $135 per share.

The per share purchase price represents a premium of approximately 12% over the company's closing stock price and a premium of approximately 27% over the company's closing stock price, the day prior to Elliott Management Corporation's announcement that it had acquired an approximate 9% interest in the company.

Following the closing, Veritas and Evergreen expect to combine athenahealth with Virence Health ("Virence"), the GE Healthcare Value-based Care assets that Veritas acquired earlier this year. The combined business is expected to be a leading, privately-held healthcare information technology company with an extensive national provider network of customers and world-class products and solutions to help them thrive in an increasingly complex environment.

"After a thorough strategic review process, we have decided to enter this agreement with Veritas, which we believe maximises value for our shareholders and accelerates our goal to transform healthcare," said Jeff Immelt, Executive Chairman of athenahealth.

"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 company will be led by Virence Chairman and Chief Executive Officer Bob Segert and an executive leadership team comprised of executives from both companies. Following the completion of the transaction, Virence's Workforce Management business will become a separate Veritas portfolio company under the API Healthcare brand.

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"athenahealth is a market leader and a natural and strategic fit with Virence," added Ramzi Musallam, CEO and Managing Partner of Veritas Capital.

"Virence and athenahealth have differentiated and complementary solutions, deep relationships with their respective customer bases and a shared culture of commitment to innovation. We look forward to leveraging our expertise in the sector, as well as the capabilities and solutions across both companies to provide superior value to customers, and create exciting growth opportunities for both sets of employees as Bob and the team build the future of healthcare IT." 

"We are excited by the opportunity to partner with athenahealth, one of the largest and most connected provider networks in the nation, to drive outcomes that matter the most to our customers," commented Bob Segert, Chairman and CEO of Virence.

 "athenahealth and Virence have complementary portfolios and highly-talented people, and this combination expands our depth and reach across the continuum of care. I'm looking forward to combining our mission-driven cultures to create an even stronger healthcare IT company."

Upon completion of the transaction, Elliott's private equity subsidiary, Evergreen Coast Capital, will retain a minority investment stake in the combined company.

Evergreen Managing Director Isaac Kim said, "We look forward to taking part in this unique opportunity. Under Bob's leadership and with Veritas' strategic oversight and strong track record of value creation, we believe the combined company will be a true leader in healthcare IT, ideally positioned to improve outcomes and reduce the cost of care."  

The transaction is expected to close in the first quarter of 2019, subject to the approval of the holders of a majority of athenahealth's outstanding shares and the satisfaction of customary closing conditions and regulatory approvals