- Athenahealth's $5.7 billion acquisition by Veritas Capital and Evergreen Coast Capital, a subsidiary of Evergreen Management, is now complete, following a shareholder vote to approve the transaction last week, the companies announced Monday.
- Bob Segert, CEO of Virence Health, (which Veritas bought last year) will head the new company, along with a management team made up of executives from both companies. It will be headquartered at athenahealth's existing campus in Watertown, Massachusetts.
- Completion of the all-cash acquisition caps a turbulent year for the EHR company, which included disappointing bookings numbers and the exit of athenahealth founder and CEO Jonathan Bush, who resigned in June after court records revealed past domestic abuse charges.
In a May SEC filing, athenahealth's largest shareholder, Janus Henderson Group, reported urging the cloud-based health IT vendor to look for a buyer after it became concerned about athenahealth's management and performance. Soon after, Elliott Management submitted an unsolicited bid of $160 a share, or about $6.9 billion, but received little response.
Athenahealth revealed the buyers in early November, following months of speculation about would-be bidders and extension of the acquisition bid deadline, which many suspected was to accommodate a strategic latecomer. Among those rumored to be eyeing the company was healthcare payments system provider nThrive.
Companies like athenahealth have been diversifying their revenue streams as hospital adoption of EHRs has neared saturation. In recent years it has trimmed its workforce by 9%, restructured management layers and moved its network toward a platform-as-a-service EHR model. The company's current offerings include revenue cycle, patient engagement, care coordination and population health services.
"The combination of athenahealth and Virence brings together two innovative companies with complementary expertise and a shared focus and passion for improving healthcare outcomes," Ramzi Musallam, CEO and managing partner of Veritas Capital, said in a statement. "With a network of over 160,000 providers, the combined company is positioned for future growth and new market opportunities and has the necessary scale to make a transformation impact in the healthcare industry."
As part of the deal, Virence's workforce management business will be broken out into a separate Veritas portfolio company under the API Healthcare brand, the company said.