Morningstar | Athenahealth Bought for $135 per Share in $5.7 Billion Deal; Excellent Deal for Shareholders
On Nov. 12, Athenahealth announced that the company had agreed to be acquired by Veritas Capital and Evergreen Coast Capital (a private equity affiliate of Elliot Management) for $135 per share or $5.7 billion in cash. While this offer is well below Elliot’s initial $160 bid, it nonetheless represents a significant premium above our $110 standalone fair value estimate. We believe this is a great outcome for shareholders and we applaud the boards efforts to sell the firm. Given the rapidly shifting healthcare IT market, and what we believe to be Athena’s challenged position, this was the bests course of action that leadership could have taken, from our perspective. Given the announcement, we are updating our fair value estimate for no-moat Athena to $135 per share. While the current offer is much lower than the previous Elliot bid, it does value Athena at a 12.5% premium to the closing price prior to the announcement and a 23% premium to our previous standalone value. This also marks the end of a tumultuous last several months of a major strategic review highlighted by founder and former CEO Jonathan Bush’s departure.Veritas and Evergreen expect to merge Athenahealth with Virence Health, which was acquired by Veritas in July. The combined healthcare IT company will be led by Bob Segert, who was appointed CEO of Virence Health in September and has over 20 years of experience with IT firms. With experienced leadership and the combined assets of Athenahealth and Virence Health, we believe the private combined company will fare better within the pressured HCIT space. Prior to the deal announcement, Athena had reported a middling quarter, with revenue of $331 million, up 9% from last year and provider sequential growth in the midsingle digits. However, bookings continued to decline, with total bookings of $46.6 million representing a 29% slide from last year and 37% decline from the prior quarter. With healthcare IT maturing and Athena's small-provider niche saturated, we believe the deal was the right move for shareholders.
Athenahealth partners with hospital and ambulatory clients to drive clinical and financial results. The company provides network-enabled medical record, revenue cycle, patient engagement, care coordination, and population health services, as well as Epocrates
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.