Veritas Capital finalized its acquisition of Athenahealth for approximately $5.7 billion in cash on Monday.
Virence Health, the former GE Healthcare value-based care assets that Veritas acquired in 2018, will combine with the electronic health record (EHR) and practice management software vendor under the Athenahealth name and brand. Evergreen Coast Capital, a subsidiary of Elliott Management, will be a minority investor in the combined company.
Elliott, which owns 9% of Athenahealth, began publicly pressuring the company in May to consider a takeover offer valued at $160 a share, or about $7 billion. That kicked off a tumultuous several months in which founder and longtime CEO Jonathan Bush was forced to resign and the company began considering outside offers under the direction of chairman and former GE CEO Jeff Immelt. UnitedHealth and Cerner were reportedly among those that submitted initial bids. At one point, healthcare payments company nThrive was supposed to swoop in as the company's white knight.
When the company's acquisition by one of its top investors was announced back in November, company shareholders filed three separate class action lawsuits alleging that Athenahealth executives were holding back on sharing crucial information about how they arrived at a final sale price of the company of $5.7 billion. The lawsuits were voluntarily dropped in January after the company released an amended proxy statement, according to an SEC filing and court documents.
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With the acquisition now a done deal, the combined company will be led by Virence Chairman and Chief Executive Officer Bob Segert and an executive leadership team comprised of executives from both companies, and will be headquartered on the Athenahealth campus in Watertown, Massachusetts, company officials said. As part of the transaction, Virence's workforce management business becomes a separate Veritas portfolio company under the API Healthcare brand.
“The combination of Athenahealth and Virence brings together two innovative companies with complementary expertise and a shared focus and passion for improving healthcare outcomes," said Ramzi Musallam, CEO and managing partner of Veritas Capital. "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 transformational impact in the healthcare industry."
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"We look forward to leveraging our experience in healthcare IT to support Bob Segert and the leadership team in their mission to help clients succeed," Musallam said.
Segert described Athenahealth as "one of the most unique and valuable assets in healthcare" with "industry-leading solutions and a vision and model for delivering financial and clinical results for providers."
"By combining our companies’ cultures, solutions and teams, we have an opportunity to accelerate that vision, achieving a scale that will allow us to unlock new value for all of our customers. Today marks the first step in our new journey as a united team, and we are more committed than ever to investing in innovation, delivering a superior customer experience, and continuing our collective mission to transform healthcare," Segert said.
The deal was announced back in November and received approval from Athenahealth shareholders on Feb. 7, 2019. As a result of the completion of the transaction, shares of Athenahealth common stock will be removed from listing on Nasdaq, with trading in Athenahealth shares to be suspended following the closing of business today.