The drama surrounding an athenahealth buyout has at last reached a conclusion.
Veritas Capital and Elliott Management will acquire the Watertown, Massachusetts health IT vendor for $5.7 billion.
Through the deal, which is expected to close in the first quarter of 2019, Veritas and Evergreen Coast Capital (Elliott’s Menlo Park affiliate) will pay $135 per share.
After the transaction closes, Veritas and Evergreen will combine athenahealth with Virence Health, the former GE Healthcare value-based care unit Veritas bought earlier this year. The combined organization will operate under the athenahealth brand and be based in Watertown, Massachusetts. Virence CEO Bob Segert will lead the new company.
“Combining with Virence will create new opportunities for collaboration and growth,” athenahealth executive chairman Jeff Immelt said in a statement. “Operating as a private company with Veritas’ ownership and support will provide athenahealth with increased flexibility to achieve our purpose of unleashing our collective potential to transform healthcare.”
Evergreen Coast Capital will retain a minority investment stake in the combined company.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Back in May, Elliott Management made a $6.9 billion offer for athenahealth at $160 per share. The firm was aggressive in pursuing athenahealth, sending multiple letters urging the vendor to carefully consider a sale.
In early June, more news emerged from the company when Jonathan Bush stepped down from his positions of president, CEO and a member of the board of directors. His departure came after he admitted to physically attacking his ex-wife and as allegations of his inappropriate behavior at athenahealth were brought into the spotlight.
A few months later, athenahealth had yet to accept an offer. A day after a September New York Post report said Elliott Management was reconsidering its $160-per-share bid for athenahealth, a source with knowledge of the process told MedCity that Elliott remained engaged and working toward submitting a bid.
Photo: D3Damon, Getty Images
