Athenahealth Is Near Deal With Veritas Capital, Elliott
Deal would see Singer’s Elliott invest more capital in company.
(Bloomberg) -- Private equity firm Veritas Capital has teamed up with Elliott Management Corp. to bid for health-care technology company Athenahealth Inc., according to people familiar with the matter.
The firms are in advanced talks with Athenahealth about a deal that would see Elliott, which owns about 9 percent of the company, invest more for a larger ownership stake alongside Veritas, said the people, who asked not to be identified as the details aren’t public.
The price being discussed couldn’t immediately be learned. Negotiations are ongoing and a final deal hasn’t been reached, the people said.
Athenahealth shares rose as much as 6.1 percent and traded up 2.9 percent to $127.28 at 12:11 p.m. in New York, valuing the company at about $5.2 billion.
Representatives for Watertown, Massachusetts-based Athenahealth, Elliott and Veritas declined to comment.
Elliott began agitating for changes at Athenahealth in 2017. The New York-based hedge fund, run by billionaire Paul Singer, made an unsolicited proposal to acquire the company for $160 a share in May, subject to due diligence. After Athenahealth then opened its books to would-be buyers, other offers came in lower, prompting advisers to reach out to gauge suitors’ interest in reentering the process at a lower price, the people said.
Private equity firms including Thoma Bravo, Bain Capital, Hellman & Friedman, Clayton, Dubiliar & Rice and TPG were among those that had considered bids, the people said.
In June, Athenahealth Chief Executive Officer Jonathan Bush stepped down following allegations of misconduct. At the time, the company said it would also explore a sale or merger and would start looking for a CEO. Former General Electric Corp. CEO Jeffrey Immelt took on the role of executive chairman at Athenahealth when Bush, a cousin of President George W. Bush, left. The company is scheduled to announce third-quarter earnings on Thursday.
Veritas Capital, based in New York, invests in technology-focused companies including Cotiviti, which helps health-care firms use technology for regulatory compliance. In April it agreed to buy part of General Electric’s health-care IT business for $1.05 billion.
To contact the reporters on this story: Kiel Porter in New York at kporter17@bloomberg.net;Scott Deveau in New York at sdeveau2@bloomberg.net;Nabila Ahmed in New York at nahmed54@bloomberg.net
To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Michael Hytha
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