Private-equity firms Bain Capital and Hellman & Friedman LLC are close to a deal to acquire healthcare-technology firm Athenahealth Inc. for about $17 billion including debt, according to people familiar with the matter, in the latest in a string of large-scale leveraged buyouts.
A deal for closely held Athenahealth could be completed in the coming days, the people said. The private-equity pair is poised to prevail in an auction of the Watertown, Mass., company, though there is no guarantee they will clinch a deal.
Athenahealth provides cloud-based software to healthcare providers that helps patients communicate with their doctors, streamlines billing and maintains patient records. The company is one of a handful of firms specializing in electronic health records and competes with larger players such as Cerner Corp. and privately-held Epic Systems Corp.
Demand for healthcare technology, already on the rise, has received a boost in the pandemic as more people attend to their medical needs remotely.
The company since 2019 has been owned by Veritas Capital and Evergreen Coast Capital, the private-equity arm of activist investor Elliott Management Corp. They agreed to take it private in a roughly $5.5 billion deal in 2018, following an acrimonious activist campaign led by Elliott that centered on Athenahealth’s co-founder and former chief executive, Jonathan Bush. Mr. Bush stepped down as president and CEO in June 2018 after it surfaced in a 2006 divorce proceeding that he had assaulted his then-wife. He has previously apologized, and Athenahealth said at the time that Mr. Bush had “made amends” with his ex-wife.
Athenahealth’s current owners combined it with Virence Health Technologies, which was already owned by Veritas, and installed Virence’s CEO, Bob Segert, to lead the combined company.
Bloomberg reported in September that Athenahealth’s private-equity owners were weighing a sale or public offering.
A deal for Athenahealth would be the latest in a string of big buyouts this year. Private-equity firms had largely shied away from deals in the double-digit billions after a previous crop of big buyouts struggled in the wake of the 2007-08 financial crisis. But such deals have come surging back, fueled by firms’ need to put their record piles of unspent cash to work in a pricey market.
Based in Boston with offices around the world, Bain manages about $150 billion in assets across private equity credit, public equity, venture capital and real estate.
With offices in San Francisco, New York and London, Hellman & Friedman has over $80 billion in assets under management and committed capital. The firm, which was founded in 1984, has a strategy of making a limited number of large-scale investments in growing companies in sectors including software and technology, financial services, healthcare, retail and consumer. It was part of a group that signed a $30 billion deal for medical-supply company Medline Industries Inc. in June.
Source: Mint