Athenahealth bought by private equity firms Hellman & Friedman, Bain Capital
The $17 billion deal marks the second time the cloud health IT vendor has been acquired in the past three years.
Cloud computing vendor athenahealth announced Monday that it would be jointly acquired by affiliates of Bain Capital and Hellman & Friedman for $17 billion.
The company, which offers electronic health 1record and physician practice tools, said the investment was expected to be completed in the first quarter of 2022.
Chair and CEO Bob Segert will continue in his position, said athenahealth in a press release, as will the current management team.
“Our employees, customers and partners are the source of our success and inspiration as we create a thriving ecosystem that delivers accessible, high-quality and sustainable healthcare for all,” said Segert in a statement.
WHY IT MATTERS
Athenahealth, which was acquired by private equity firms Veritas Capital and Evergreen Coast Capital in 2019 for $5.7 billion, says it currently partners with more than 140,000 ambulatory care providers in all 50 states and across more than 120 specialties.
In 2020, athenahealth launched a new EHR-embedded telehealth tool. According to Jessica Sweeney-Platt, vice president of research and editorial strategy, the company has offered 18.4 million virtual appointments over the past year.
“Today marks a significant milestone for athenahealth and our partnership with Veritas Capital and Evergreen Coast Capital, and we are thrilled to work with Hellman & Friedman and Bain Capital to drive the next phase of our growth journey,” said Segert.
But the vendor has also faced hurdles.
Before that acquisition – which included a merger with Virence Health, also owned by Veritas – the company had confronted challenges, including an activist investor campaign from Elliott Management; the stepdown of founder and former CEO Jonathan Bush amid allegations of sexual harassment and domestic abuse; and layoffs of 9% of the workforce.
And this January, the U.S. Department of Justice announced that the company agreed to pay $18.25 million to resolve False Claims Act violation allegations. A spokesperson for the company said it admitted no wrongdoing under the settlement.
Still, the company’s new owners voiced optimism for its future growth.
“Given our deep experience in software and healthcare, we are excited to work with Bob and the executive team to rapidly scale the business and continue to innovate and grow alongside our most disruptive and innovative ambulatory care clients to build the foundations of a multi-sided digital care network between patient, payer and provider,” Allen Thorpe, partner at Hellman & Friedman, said in a statement.
THE LARGER TREND
November has seen several big money moves in the health IT space, with software-as-a-service company EverCommerce announcing its new ownership of EHR vendor DrChrono and the newly launched FemTec Health acquiring beauty box company Birchbox and social marketing platform Liquid Grids.
Meanwhile, GE said it would spin off its healthcare division, GE Healthcare, in early 2023. Virence Health, which merged with athenahealth, was once GE Healthcare’s value-based care arm.
ON THE RECORD
“Over the course of our successful partnership with Bob and the management team, athenahealth has driven tremendous growth and transformation, reinforcing its position as the premier healthcare IT company supporting the largest nationwide network of healthcare providers,” Ramzi Musallam, CEO and managing partner of Veritas Capital, said in a statement.
“Following our take-private and combination with Virence in 2019, athenahealth delivered unrivaled value to its customers by significantly increasing R&D investment resulting in higher quality care, lower costs across the healthcare ecosystem and overall improved patient outcomes,” he said.
