Watertown, Mass.-based health IT company athenahealth has attracted interest from at least five potential bidders for a possible sale of the company, people familiar with the matter told Bloomberg.
In an article posted Friday, Bloomberg reports that private equity players including Bain Capital, Hellman & Friedman, Clayton, Dubiliar & Rice and TPG are considering bids for athenahealth, the people said, asking not to be identified because the matter is private. Elliott Management Corp., the sometimes-activist fund run by billionaire Paul Singer, is also weighing a bid, people familiar with the matter told Bloomberg.
Elliott, which owns 9 percent of athenahealth, may keep that stake if it is unsuccessful in acquiring the company, the people said.
“athenahealth has received indications of interest above $135 a share, the people said, with final bids due by the end of the month,” Bloomberg reported.
As previously reported by Healthcare Informatics, in May, Elliott Management made an all-cash takeover offer to buy athenahealth, at a valuation of $6.9 billion. The investors sent a letter to athenahealth’s board proposing to acquire the company for $160 per share. In the letter, the investors criticized leadership at the electronic health record (EHR) vendor for failing to make the changes necessary “to enable it to grow as it should and to create the kind of value its shareholders deserve.”
The story continued to take turns throughout the summer, particularly following the resignation of CEO and President Jonathan Bush in June. Bush’s resignation came just a few weeks after Elliott Management’s takeover bid, and just a few days after reports surfaced that the athenahealth chief had allegedly assaulted his ex-wife more than a decade ago, and also created a “sexually hostile environment” at the company.
Following the news, various companies, both inside and outside of healthcare, were brought up as possibilities to buy athenahealth, including the Kansas City-based EHR giant Cerner Corp.
According to a report in the New York Post published in early September, Elliott Management was cited as the favorite to win the athenahealth takeover bid, reporting that Cerner and UnitedHealth declined an opportunity to acquire the health IT company.
The Sept. 6 report noted that “The healthcare companies that would most logically be interested in athenahealth, including Cerner Corp. and UnitedHealthcare, have taken a pass…” As such, Elliott has now teamed up with investment firm Bain Capital on its bid, the New York Post noted at the time.
Bain Capital owns Waystar, a healthcare technology company that was recently formed by combining Navicure and ZirMed, two revenue cycle management vendors. Waystar may benefit if Bain buys athenahealth, an industry banker told the New York Post.
However, almost two weeks later, another report in the New York Post indicated that Elliott Management had backed away from its $160-a-share bid for athenahealth. “As a result of Singer’s retreat and the lack of robust interest from others, athena has extended a final bid deadline by 10 days — to Sept. 27, sources said. Singer backing off the promised bid is a stark turnaround in the battle for the health care tech company,” the New York Post article stated.
According to an October 11 article in the New York Post, suitors whose offers were deemed too low months ago are being invited to take a second look, according to sources. Bids are now believed to value the company at no greater than $135 a share.
“athena first sought final bids by a Sept. 17 deadline. Then, it extended that deadline by 10 days. Now, the company will likely not make a decision until next week at the earliest on how to proceed, two sources said,” according to the article.
“The seller is deciding between a full sale, a merger with Pamplona Capital’s NThrive or to continue as a listed company,” the New York Post article reported.
The New York Post article also reports that if the company decides not to sell or merge, it will have to find a new CEO to replace Bush, sources said. Former GE chief Jeff Immelt has been running Athena as its executive chairman since the summer.
“They definitely need a CEO that is not Jeff Immelt,” the analyst said in the article. “If I’m the candidate, I would want to know what Elliott’s perspective is going forward.”