$5.7 Billion Deal Closed: Athenahealth Reborn as Combined Entity with Virence Health to Advance Value-Based Healthcare

VCBeat (WeChat Official Account: vcbeat) has learned that Veritas Capital and Evergreen Coast Capital announced on February 12, 2019, local time, the completion of their acquisition of Athenahealth for $5.7 billion. Through this transaction, Athenahealth and Virence Health have merged into a single company headquartered in Massachusetts. The combined entity will retain the Athenahealth name and brand.

According to the latest reports from foreign media, the new company’s total revenue exceeds $1.7 billion, serving 160,000 customers. In addition to Bob Segert’s appointment as CEO of the new entity, no other core leadership positions have been officially announced. However, under the acquisition agreement, Veritas Capital and Evergreen Coast Capital will each hold a majority of seats on the board of directors. As part of the transaction, Virence Health’s workforce management division was integrated into Veritas Capital’s investment portfolio. Following the completion of the deal, Athenahealth’s ticker symbol was removed from Nasdaq listings, and trading of Athenahealth shares ceased on February 12, 2019, local time.

“Athenahealth and Virence Health are complementary in nature. Athenahealth enjoys a strong reputation and a substantial client base among primary care providers, while Virence Health serves many high-net-worth clients. I believe the merged entity will deliver enhanced services to customers,” said Bermudez, Senior Partner at Veritas Capital, in an interview with the media. “The decision to merge the two companies stems from our belief that operating multiple healthcare platforms simultaneously is an arduous and unrewarding endeavor. Although the combined profits of the two companies would be substantial from a financial perspective, customers would find it difficult to access convenient and efficient healthcare services.”

“This marks a new beginning and a new challenge,” said Bob Segert, CEO of the new company. “Moving forward, Athenahealth will develop practical strategies to chart the course for the company’s long-term growth. We also welcome more talented professionals to join us and contribute to the healthcare industry.”

Veritas Capital, established in 1992, is a leading private equity investment firm. Its investment sectors include aerospace and defense, healthcare, telecommunications, energy, government services, and education. The company’s total value currently exceeds $8 billion.

Virence Health, established in 1996, is a company that provides software services to enterprises. The company is dedicated to developing patient-centered healthcare solutions, enabling healthcare professionals to leverage data and information to improve care outcomes, thereby enhancing the quality and efficiency of the healthcare industry. Virence excels in building strong customer partnerships.

Elliott Management Corporation, founded in 1977, manages approximately $35 billion in assets. Elliott primarily invests in companies undergoing bankruptcy or restructuring within global public equity and fixed-income markets, employing a conservative investment approach and utilizing various hedge fund strategies. Evergreen Coast Capital is an affiliate of Elliott’s Menlo Park office, focusing on technology investments.

(Compiled by Hu Xuan)