Athenahealth’s $17 billion takeover is the latest private equity

Athenahealth, a health software company, said Monday it will be sold to investment firms Hellman & Friedman and Bain Capital. for 17 billion dollarsmade it one of the largest leveraged buyouts in a full year with them.

Also, its founder, a member of the Bush political family, is turning a new leaf for Athenahealth, which is struggling after accusations of domestic abuse and inappropriate workplace behavior emerged during a takeover battle with hedge fund Elliott Management.

The sale of Athenahealth is the latest example of private equity firms taking advantage of favorable terms, including low interest rates that allow them to borrow cheaply to make big deals. (In June, Hellman & Friedman was part of another major healthcare takeover, a $30 billion acquisition of Medline Industries.) Globally, investment firms with nearly $2 trillion of undeployed capital spent a record $758 billion worldwide. . More than 1,500 purchases in the first nine months of the year, according to Dealogic.

This wave of deals includes the takeover of Athenahealth, which traces its roots back to a tech company founded by Jonathan Bush in 1997. Eventually, he became a provider of patient registration and billing services, along with President George HW’s nephew Mr. Bush. Bush and President George W. Bush’s cousin – as telegenic leader.

But Mr. Bush came under pressure in 2017 from the billion-dollar activist hedge fund Elliott Management, known for its hard-nosed tactics. Elliott had bought stock and demanded cost cuts and other changes, which caused the company to announce layoffs and later the appointment of former General Electric CEO Jeffrey R. Immelt as chairman.

Mr. Bush took a step back In June 2018, among accusations of domestic abuse and improper conduct in the workplace against his ex-wife.

After making a hostile takeover bid for Athenahealth in May 2018, Elliott became a co-owner of the company. Veritas Capital, Elliott’s private equity arm, and Evergreen Coast Capital have agreed to buy him. for $5.5 billionand later merged it with Virence Health Technologies, which Veritas brought together from divisions of GE’s healthcare division.

Athenahealth currently works with more than 140,000 healthcare providers in all 50 states.

Jesse Cohn, Elliott managing partner, who led the activism campaign, said: “Elliott is proud to work with Veritas to help transform Athenahealth, and we welcome Hellman & Friedman and Bain Capital as new representatives of this unique and important healthcare leader.”

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

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