H&F, Bain Capital tap into health tech boom with $17 bln Athenahealth deal

H&F, Bain Capital tap into health tech boom with $17 bln Athenahealth deal

Private-equity firms Hellman & Friedman LLC and Bain Capital on Monday agreed to buy Athenahealth for $17 billion, the latest sign of rising interest in companies powering the healthcare sector’s shift to the cloud.

Privately held Athenahealth offers software that can help organize patient visits, document patient records and simplify payments. It competes with the likes of Cerner Corp (CERN.O).

The boom has sparked several deals in the sector, including Microsoft Corp’s (MSFT.O) $16 billion buyout of Nuance Communications Inc (NUAN.O) in April.

The healthcare industry has also seen a rise in dealmaking by private-equity firms, which have joined hands this year to acquire companies for huge sums.

Blackstone (BX.N), Carlyle Group (CG.O) and Hellman & Friedman together agreed to buy medical supply and equipment company Medline Industries Inc in June for $34 billion, including debt. nL4N2M536I]

Athenahealth was taken private in 2019 by Evergreen Coast Capital, hedge fund Elliott’s private equity arm, and investment firm Veritas in a $5.7 billion deal.

It later merged with Virence Health, a healthcare software provider Veritas bought from General Electric Co (GE.N).

“Following our take-private and combination with Virence in 2019, Athenahealth delivered unrivaled value to its customers by significantly increasing R&D investment,” said Ramzi Musallam, CEO of Veritas Capital.

Veritas and Evergreen will retain a minority stake in Athenahealth, which will also be partially owned by other investors such as Singapore sovereign wealth fund GIC.

The deal is expected to close in the first quarter of 2022 and Bob Segert will continue as the top boss of Athenahealth.

Evercore and Goldman Sachs & Co were the lead financial advisors to Athenahealth and Veritas Capital.