Athenahealth’s $17 Billion Takeover Is the Latest Private Equity Megadeal


Athenahealth, a health care software company, said on Monday that it would be sold to the investment firms Hellman & Friedman and Bain Capital for $17 billion, making it one of the biggest leveraged buyouts in a year full of them.

It also opens a new chapter for Athenahealth, whose founder, a member of the Bush political family, was forced out after accusations of domestic abuse and inappropriate workplace behavior came to light during a takeover battle with the hedge fund Elliott Management.

Athenahealth’s sale is the latest example of private equity firms taking advantage of favorable conditions, including low interest rates that let them borrow money cheaply, to strike huge deals. (In June, Hellman & Friedman was part of another sizable health care takeover, the $30 billion buyout of Medline Industries.) Globally, investment firms, which are sitting on nearly $2 trillion in capital yet to be deployed, spent a record $758 billion across more than 1,500 buyouts in the first nine months of the year, according to Dealogic.

That deal-making wave now includes the takeover of Athenahealth, which traces its roots to a technology company founded by Jonathan Bush in 1997. It eventually became a provider of patient record and billing services, with Mr. Bush — a nephew of President George H.W. Bush and cousin of President George W. Bush — as its telegenic leader.

But Mr. Bush came under pressure in 2017 from Elliott Management, the multibillion-dollar activist hedge fund known for its hard-nosed tactics. Elliott had taken a stake and demanded cost cuts and other changes, prompting the company to announce layoffs and, later, the appointment of the former General Electric chief executive Jeffrey R. Immelt as chairman.

Mr. Bush stepped down in June 2018 amid accusations of domestic abuse against his ex-wife and inappropriate workplace behavior.

Elliott, which had made a hostile takeover offer for Athenahealth in May 2018, ended up co-owning the company. Veritas Capital and Evergreen Coast Capital, Elliott’s private equity arm, agreed to buy it for $5.5 billion, and later combined it with Virence Health Technologies, which Veritas had assembled from parts of G.E.’s health care division.

Athenahealth now works with more than 140,000 health care providers in 50 states.

Jesse Cohn, the Elliott managing partner who oversaw the activism campaign, said: “Elliott is proud to have worked with Veritas to help transform Athenahealth, and we welcome Hellman & Friedman and Bain Capital as new stewards of this unique and important health care leader.”

“Today marks a significant milestone for Athenahealth,” said Bob Segert, Athenahealth’s chairman and chief executive, who will continue to run the company after the deal closes.



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