Veritas Capital and Elliott conclude acquisition of Athenahealth for $ 5.5 billion

(Reuters) – Private equity firm Veritas Capital and hedge fund Elliott Management have agreed to acquire US-based health software maker Athenahealth Inc. (Reuters)ATHN.O) for $ 5.5 billion in cash, said Sunday people familiar with the subject.

Athenahealth, whose cloud service is used to track the incomes of patients, doctors and hospitals, was under pressure to sell to Elliott, which holds about 9% of the company's capital. As part of a restructuring effort this year, he cut jobs and hired the former General Electric Co (GE.N) Jeff Immelt, Chairman of the Board.

The acquisition, which values ​​Athenahealth at around $ 135 per share, will be announced Monday, sources said, asking not to be identified before any official release. The shares of Athnahealth closed Friday at $ 120.35.

Athenahealth, Elliott and Veritas Capital did not immediately respond to requests for comment.

The agreement comes just months after the departure of CEO Jonathan Bush in June. Bush, a nephew of former US President George HW Bush founded Athenahealth in 1997. He resigned after apologizing following an article in a newspaper claiming that he had assaulted his former wife 14 years ago.

Elliott made an unsolicited bid on Athenahealth in May for $ 160 per share. Since then, discussions have taken place between various private equity firms to try to buy the company, sources said.

While activist investors such as Carl Icahn have already acquired companies, Elliott, based in New York, with assets of more than $ 35 billion, is one of the few hedge funds to have a team dedicated to search for redemptions.

An agreement for Athenahealth, based in Watertown, Mass., Represents the largest deal ever for Elliott's private equity arm Evergreen. He is based in Menlo Park, California, and his partner, Jesse Cohn, is spearheading it.

Athenahealth said in its third quarter results last Friday that its revenues under previous accounting standards rose to $ 331.4 million, an increase of 9% over the same period of the year. former. Its net income for the three months ended September 30, 2018 was $ 44.5 million, or $ 1.08 per diluted share.