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Tuesday, March 28, 2023

The $ 17 billion Athenahealth takeover is the latest major private equity deal.

Athenahealth, a healthcare software company, said Monday it would be sold to investment firms Hellman & Friedman and Bain Capital for $ 17 billion, making it one of the largest leveraged buyouts in a year full of such deals.

It also opens a new chapter for Athenahealth, whose founder, a member of the Bush political family, was forced to leave after allegations of domestic violence and inappropriate workplace behavior were leaked during a takeover battle with hedge fund Elliott Management.

The sale of Athenahealth is the latest example of private equity firms using favorable terms, including low interest rates, that allow them to borrow money cheaply to make big deals. (In June, Hellman & Friedman was involved in another major healthcare takeover, the $ 30 billion buyout of Medline Industries.) Globally, investment firms with nearly $ 2 trillion in capital that have not yet been tapped have spent a record $ 758 billion. more than 1,500 buyouts in the first nine months of the year, according to Dealogic.

This wave of deal-making now includes the takeover of Athenahealth, which has its roots in a technology company founded by Jonathan Bush in 1997. She eventually became a healthcare and billing service provider alongside Mr. Bush, the nephew of President George H.W. Bush and President George W. Bush’s cousin as his telegenic leader.

But in 2017, Bush came under pressure from Elliott Management, a multibillion-dollar activist hedge fund known for its tough tactics. Elliott made a bid and called for cost cuts and other changes, prompting the company to announce layoffs and later to appoint former General Electric CEO Jeffrey R. Immelt as chairman of the board.

Mr. Bush stepped down in June 2018 over domestic violence charges against his ex-wife and inappropriate workplace behavior.

Elliott, who made a hostile takeover bid at Athenahealth in May 2018, eventually became a co-owner of the company. Veritas Capital and Elliott’s private equity division, Evergreen Coast Capital, agreed to buy it for $ 5.5 billion and then merged it with Virence Health Technologies, which Veritas gathered from GE’s healthcare divisions.

Athenahealth currently works with over 140,000 healthcare providers in 50 states.

Jesse Cohn, Elliott Managing Partner who oversaw the active campaign, said: “Elliott is proud to work with Veritas to transform Athenahealth, and we welcome Hellman & Friedman and Bain Capital as the new CEOs of this unique and important healthcare leader. “

“Today marks an important milestone for Athenahealth,” said Bob Segert, Chairman and CEO of Athenahealth, who will continue to run the company after the close of the deal.

World Nation News Desk
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