Veritas Capital, Elliott close to deal to buy Athenahealth: source

Industry:    2018-11-01

Private equity firm Veritas Capital has teamed up with hedge fund Elliott Management Corp in a bid to buy U.S. healthcare software maker Athenahealth Inc (ATHN.O), and is close to sealing an agreement, a person familiar with the matter said.

It was not immediately clear how much the acquiring consortium was offering and how quickly a deal could be announced. Bloomberg News first reported that Veritas and Elliott were nearing a deal for Athenahealth.

The source asked not to be identified because the matter is confidential. Veritas did not immediately respond to requests for comment, while Athenahealth and Elliott declined to comment.

If a sale is successful, it would come just a few months after the departure of CEO Jonathan Bush last June.

Bush, a nephew of former U.S. President George H.W. Bush, founded Athenahealth in 1997. Bush stepped down after issuing an apology following a newspaper report that said he had assaulted his former wife 14 years ago.

Athenahealth had been under pressure from Elliott since it took a stake in the company last year. In the past year, it has cut jobs, hired former General Electric (GE.N) CEO Jeff Immelt as chairman and named a new finance head.

Elliott first made an unsolicited bid for the company in May of $160 per share. Since then, it has been in talks with various private equity firms on trying to buy the company, sources have said.

While activists have made offers for companies in the past and investors such as Carl Icahn have acquired companies before, New York-based Elliott, with assets of more than $35 billion, is one of the few hedge funds with a dedicated team chasing buyouts.

If Elliott succeeds in the buyout, it would represent the largest deal to date for its Evergreen private equity arm, based in Menlo Park, California, spearheaded by partner Jesse Cohn. On Wednesday, one of Elliott’s portfolio companies privately held ASG Technologies, had offered $10 per share in cash to buy financial technology provider Mitek Systems Inc (MITK.O).

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