Athenahealth Purchased for $5.7B

Athenahealth Purchased for $5.7B

Athenahealth has agreed to be acquired by a Veritas Capital and Evergreen Coast Capital affiliate for $5.7 billion, the companies announced Monday morning. "Combining with Virence will create new opportunities for collaboration and growth", Athenahealth Executive Chairman Jeff Immelt said in a statement.

Athenahealth had been under pressure from Elliott to sell itself since the hedge fund acquired a stake in the company past year. That represents a roughly 12 percent premium over the closing price of athenahealth shares on Friday.

Two big investment firms, Veritas Capital and Elliott Management, reportedly will acquire Athenahealth for about $5.5 billion in cash. Elliott had always been pushing Athenahealth to sell itself, and at one point offered $160 a share.

Jeff Immelt, former GE CEO and executive chairman of Athena, expects private ownership will benefit his Watertown (MA)-based company via "increased flexibility to achieve our objective of unleashing our collective potential to transform healthcare". Elliott, the firm that kick-started acquisition talks in May, has expressed support for the transaction.

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Veritas Capital and Evergreen Coast Capital plan to give athenahealth shareholders $135 per share in a deal that will take the company private.

In June Athenahealth's founder and CEO Jonathan Bush, a nephew of former US President George H.W. Bush, stepped down following a newspaper report alleging he had assaulted his former wife 14 years earlier.

In May Elliott made an unsolicited offer of US$160 per share for Athenahealth, a Massachusetts-based firm whose cloud-based software is used to track revenue from patients, physicians and hospitals. Its net income over the three months that ended September 30, 2018 was $44.5 million, or $1.08 per diluted share.