Listen to the article 3 min

This audio is auto-generated. Please let us know if you have feedback.

Dive Brief:

• Electronic health record vendor NextGen Healthcare announced on Wednesday it agreed to be acquired in a take-private deal by private equity firm Thoma Bravo.
• Thoma Bravo will buy NextGen for $23.95 per share, which represents a 46% premium on NextGen’s closing price on Aug. 22, according to a press release. The acquisition is expected to close in the fourth quarter this year.
• The deal comes days after Bloomberg reported the private equity firm was in advanced discussions to acquire NextGen. In August, Reuters reported that NextGen had tapped investment bank Morgan Stanley to explore a sale.

Dive Insight:

NextGen, which has over 100,000 provider clients across the U.S., will become a private company upon the deal’s completion. The company’s provider clients include accountable care organizations, independent physician associates and managed service organizations. Medicare and Medicaid cover approximately one-third of the company’s covered lives, according to NextGen’s most recent 10-K filing. NextGen’s competitors include Epic, Athenahealth, Oracle and Veradigm.

The Thoma Bravo acquisition comes after NextGen agreed earlier this summer to pay $31 million to settle allegations that it violated the False Claims Act by misrepresenting versions of its product and providing illegal incentives to induce referrals for its software. 

Healthcare investment is a “relatively uncommon play” for Thoma Bravo, comprising roughly 9% of its total investments, according to a July report from research firm Pitchbook. Information technology investments make up about 76% of Thoma Bravo’s investments.

The private equity firm’s portfolio of healthcare companies include Bluesight, a software supply chain company focusing on pharmacies and hospitals.

Thoma Bravo bills itself as “one of the largest software investors in the world,” with more than $130 billion in assets under management as of June this year. Most recently, the firm acquired identity and access management company ForgeRock in a deal valued at approximately $2.3 billion, and it completed its acquisition of business spend management company Coupa Software.