athenahealth Enters Definitive Agreement to be Acquired by Veritas Capital For $135 Per Share in Cash


A leading provider of network-enabled services for hospital and ambulatory customers nationwide, Veritas Capital ("Veritas") and Evergreen Coast Capital ("Evergreen"), today announced that they have entered into a definitive agreement under which an affiliate of Veritas and Evergreen will acquire athenahealth for approximately $5.7 billion in cash.




Under the terms of the agreement, athenahealth shareholders will receive $135 in cash per share. The per share purchase price represents a premium of approximately 12 percent over the company's closing stock price on November 9, 2018, the last trading day prior to today's announcement, and a premium of approximately 27 percent over the company's closing stock price on May 17, 2017, the day prior to Elliott Management Corporation's announcement that it had acquired an approximate 9 percent interest in the company.

Following the closing, Veritas and Evergreen expect to combine athenahealth with Virence Health ("Virence"), the GE Healthcare Value-based Care assets that Veritas acquired earlier this year. The combined business is expected to be a leading, privately-held healthcare information technology company with an extensive national provider network of customers and world-class products and solutions to help them thrive in an increasingly complex environment.

Following the close of that transaction, the combined company is expected to operate under the athenahealth brand and be headquartered in Watertown, Massachusetts. The company will be led by Virence Chairman and Chief Executive Officer Bob Segert and an executive leadership team comprised of executives from both companies. Following the completion of the transaction, Virence's Workforce Management business will become a separate Veritas portfolio company under the API Healthcare brand.

"After a thorough strategic review process, we have decided to enter this agreement with Veritas, which we believe maximizes value for our shareholders and accelerates our goal to transform healthcare," said Jeff Immelt, Executive Chairman of athenahealth. "Combining with Virence will create new opportunities for collaboration and growth. Operating as a private company with Veritas's ownership and support will provide athenahealth with increased flexibility to achieve our purpose of unleashing our collective potential to transform healthcare."

"athenahealth is a market leader and a natural and strategic fit with Virence," said Ramzi Musallam, CEO and Managing Partner of Veritas Capital. "Virence and athenahealth have differentiated and complementary solutions, deep relationships with their respective customer bases and a shared culture of commitment to innovation. We look forward to leveraging our expertise in the sector, as well as the capabilities and solutions across both companies to provide superior value to customers, and create exciting growth opportunities for both sets of employees as Bob and the team build the future of healthcare IT." 

Veritas, a government and technology focused investor, has a proven track record of driving growth for companies within the healthcare technology space, as illustrated by the firm's acquisition of Verscend Technologies and its combination with Cotiviti Holdings, as well as the firm's investment in Truven Health Analytics. Veritas has a deep understanding of the urgent need to digitize the healthcare system and brings a culture of intense customer focus and a drive for growth through focused R&D and product innovation.

"We are excited by the opportunity to partner with athenahealth, one of the largest and most connected provider networks in the nation, to drive outcomes that matter the most to our customers," said Bob Segert, Chairman and CEO of Virence. "athenahealth and Virence have complementary portfolios and highly-talented people, and this combination expands our depth and reach across the continuum of care. I'm looking forward to combining our mission-driven cultures to create an even stronger healthcare IT company."

athenahealth investor Elliott Management Corporation ("Elliott") has expressed support for the transaction. Elliott Partner Jesse Cohn said, "We are pleased to support this transformative transaction combining athenahealth and Virence, which we believe represents an outstanding, value-maximizing outcome for athenahealth shareholders."

Upon completion of the transaction, Elliott's private equity subsidiary, Evergreen Coast Capital, will retain a minority investment stake in the combined company.

Evergreen Managing Director Isaac Kim said, "We look forward to taking part in this unique opportunity. Under Bob's leadership and with Veritas' strategic oversight and strong track record of value creation, we believe the combined company will be a true leader in healthcare IT, ideally positioned to improve outcomes and reduce the cost of care."  

Approvals and Timing

The transaction is expected to close in the first quarter of 2019, subject to the approval of the holders of a majority of athenahealth's outstanding shares and the satisfaction of customary closing conditions and regulatory approvals.

The athenahealth Board of Directors has unanimously approved the merger agreement and intends to recommend that athenahealth shareholders vote in favor of it at a Special Meeting of Stockholders, to be scheduled as soon as practicable.  

The transaction is not subject to a financing condition.

http://newsroom.athenahealth.com/phoenix.zhtml?c=253091&p=irol-newsArticle&ID=237670...

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