PE Firms Bain, H&F to Buy Athenahealth in $17 Billion Deal
PE Firms Bain, H&F to Buy Athenahealth in $17 Billion Deal
(Bloomberg) -- Bain Capital and Hellman & Friedman LLC agreed to buy health information technology company Athenahealth Inc. in a $17 billion deal.
The sale is expected to be completed in the first quarter of 2022, subject to regulatory approvals and customary closing conditions, Athenahealth said Monday in a statement. No further financial terms were given.
The private equity firms will take control of privately held Athenahealth from Veritas Capital and Elliott Investment Management, who bought it for about $5.7 billion in 2018.
Athenahealth helps doctors and hospitals collect money from health insurers and the government for services they provide. It also has an electronic health records service that helps providers manage workflow and document patient visits, among other services.
The deal comes as multiples in health-care IT are booming. The coronavirus pandemic accelerated the need for health systems to adopt digital technologies to manage their businesses and analyze data. U.S. provider groups and hospitals are facing more pressure to watch their bottom lines after the pandemic caused many potential patients to delay procedures, wiping out billions of dollars of revenue. That has increased demand for services from companies like Athenahealth.
Companies are also rushing to complete large buyouts while debt still looks cheap. U.S. junk bond sales set an annual record in November, with borrowers looking to lock in low coupons before the Federal Reserve eventually raises interest rates. Sales of leveraged loans are booming as well, with private equity firms taking advantage of intense demand for the debt to finance M&A activity and dividends.
Health-care technology companies have announced at least $56 billion of deals so far this year, up from $9 billion last year, according to data compiled by Bloomberg. That includes Nordic Capital and Insight Partners’ $6.4 billion purchase of Inovalon Holdings Inc., and UnitedHealth Group Inc.’s plan to purchase Change Healthcare Inc. for about $13 billion, including debt.
Other investors involved in the Athenahealth purchase include Veritas and Evergreen Coast Capital, which will each retain a minority investment in Athenahealth. Coinvestors also include GIC, Singapore’s sovereign wealth fund, and a wholly owned subsidiary of the Abu Dhabi Investment Authority.
Evercore and Goldman Sachs & Co. are lead financial advisers to Athenahealth and Veritas for the transaction. Deutsche Bank Securities Inc., Barclays, Morgan Stanley & Co., BMO Capital Markets, and BofA Securities, Inc. are financial advisers to Hellman & Friedman and Bain.
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