Veritas Capital to Acquire Athenahealth Inc.

In November 2018, Veritas Capital and Elliott Management announced that they would acquire Athenahealth Inc. (a publicly traded American company that provides network-enabled services for healthcare and point-of-care mobile apps) for $5.5 billion in cash. This deal values Athenahealth at approximately $135 each share. Veritas Capital is headquartered in the US and specializes in national security, information technology, and other products focusing on government and commercial end users. Elliott Management was amidst the list of five likely purchasers interested in partaking in a concluding bid for Athenahealth acquisition. Elliott Management first declared its interest to acquire Athenahealth for $160 per share in May via three open letters to the board of directors of Athenahealth. The hedge fund’s preliminary proposal to the health IT company resulted to $7 billion. Jonathan Bush (previous CEO of Athenahealth) resigned in June.

Athenahealth has been contemplating the acquisition since June, post proposals from Elliott. The hedge fund initially unveiled a 9.2% stake in the company in May 2017. In May 2018, Elliott initiated a $6.4 billion bid for Athenahealth. Elliott Management expects that the private market will help as a perfect setting for Athenahealth as it will permit the company to attain strategic business purposes and ingenuities without reporting quarterly earnings.

Other private equity firms possibly interested in the acquisition include Bain Capital, Hellman & Friedman, Clayton, Dubilier & Rice, and TPG. Bain Capital and TPG partaken in the discussion of bidding for Athenahealth in August along with UnitedHealth Group. UnitedHealth has since dropped out of the bidding.

– Victor Mukherjee,
AM,
Infoholic Research