Athenahealth will be acquired by private-equity firms Bain Capital and Hellman & Friedman roughly three years after the company went private in a separate private-equity deal.
Affiliates of Bain Capital and Hellman & Friedman plan to jointly acquire Athenahealth, a Watertown, Massachusetts-based developer of healthcare software, for $17 billion in a deal expected to close in the first quarter of 2022, the companies said Monday. Athenahealth's previous owners, Veritas Capital and Evergreen Coast Capital, will retain minority investments in the company.
Bob Segert, chairman and chief executive officer of Athenahealth, said the acquisition "marks a significant milestone for Athenahealth."
"We are thrilled to work with Hellman & Friedman and Bain Capital to drive the next phase of our growth journey," Segert said in a news release Monday. Segert will continue to lead Athenahealth with the company's current management team.
More than 140,000 ambulatory care providers use Athenahealth's cloud-based software, which includes tools for electronic health records, patient engagement and revenue-cycle management.
Athenahealth, previously a public company led by its co-founder Jonathan Bush, has been owned by private equity firms Veritas Capital and Evergreen Coast Capital since February 2019, when it was purchased for $5.7 billion. The two private equity firms combined Athenahealth with Virence Health, a value-based care business that Veritas Capital acquired from GE Healthcare in 2018.
The Athenahealth acquisition followed an aggressive campaign by Evergreen Coast Capital's parent company, hedge fund Elliott Management, to purchase the company.
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Elliott Management in May 2018 made an unsolicited all-cash bid for Athenahealth worth nearly $7 billion, kicking off a monthslong question over the company's future. A month later in June 2018, Bush stepped down from his post as Athenahealth's CEO, as reports surfaced of violence against his now ex-wife and a settlement related to alleged sexual harassment.
Bush now serves as CEO of a separate company he founded, called Zus Health, and serves as executive chairman of Firefly Health.
Once the deal closes, Athenahealth will be majority owned by Hellman & Friedman, Bain Capital Private Equity and Bain Capital Tech Opportunities. Veritas Capital and Evergreen Coast Capital will retain minority investments alongside new investors GIC, Singapore's sovereign wealth fund, and a subsidiary of the Abu Dhabi Investment Authority.
Allen Thorpe, a partner at Hellman & Friedman, in a news release said the firm plans to "rapidly scale the business" to link patients, payers and providers in a digital care network. David Humphrey, a managing director at Bain Capital Private Equity, said the firm will leverage its experience with vertical software and healthcare to support Athenahealth in developing new products and gaining market share.
Bain Capital has been growing its reach in healthcare. Bain Capital Private Equity last week became a majority owner in InnovaCare Health, a value-based primary care provider group, and earlier this month a separate investment arm of Bain dropped $150 million to launch a new health insurance brokerage focused on the Medicare Advantage market.
