WATERTOWN, Mass., SEATTLE and NEW
YORK, Nov. 12, 2018
/PRNewswire/ -- athenahealth, Inc. (NASDAQ: ATHN),
a leading provider of network-enabled services for hospital
and ambulatory customers nationwide, Veritas Capital ("Veritas")
and Evergreen Coast Capital ("Evergreen"), today announced that
they have entered into a definitive agreement under which an
affiliate of Veritas and Evergreen will acquire athenahealth for
approximately $5.7 billion in
cash.
Under the terms of the agreement, athenahealth shareholders will
receive $135 in cash per share. The
per share purchase price represents a premium of approximately 12
percent over the company's closing stock price on November 9, 2018, the last trading day prior to
today's announcement, and a premium of approximately 27 percent
over the company's closing stock price on May 17, 2017, the day prior to Elliott Management
Corporation's announcement that it had acquired an approximate 9
percent interest in the company.
Following the closing, Veritas and Evergreen expect to combine
athenahealth with Virence Health ("Virence"), the GE Healthcare
Value-based Care assets that Veritas acquired earlier this year.
The combined business is expected to be a leading, privately-held
healthcare information technology company with an extensive
national provider network of customers and world-class products and
solutions to help them thrive in an increasingly complex
environment.
Following the close of that transaction, the combined company is
expected to operate under the athenahealth brand and be
headquartered in Watertown,
Massachusetts. The company will be led by Virence Chairman
and Chief Executive Officer Bob
Segert and an executive leadership team comprised of
executives from both companies. Following the completion of the
transaction, Virence's Workforce Management business will become a
separate Veritas portfolio company under the API Healthcare
brand.
"After a thorough strategic review process, we have decided to
enter this agreement with Veritas, which we believe maximizes value
for our shareholders and accelerates our goal to transform
healthcare," said Jeff Immelt,
Executive Chairman of athenahealth. "Combining with Virence will
create new opportunities for collaboration and growth. Operating as
a private company with Veritas's ownership and support will provide
athenahealth with increased flexibility to achieve our purpose of
unleashing our collective potential to transform healthcare."
"athenahealth is a market leader and a natural and
strategic fit with Virence," said Ramzi Musallam, CEO and Managing Partner of
Veritas Capital. "Virence and athenahealth have differentiated
and complementary solutions, deep relationships with their
respective customer bases and a shared culture of
commitment to innovation. We look forward to leveraging our
expertise in the sector, as well as the capabilities and solutions
across both companies to provide superior value to
customers, and create exciting growth opportunities for
both sets of employees as Bob and the team build the
future of healthcare IT."
Veritas, a government and technology focused investor, has a
proven track record of driving growth for companies within the
healthcare technology space, as illustrated by the firm's
acquisition of Verscend Technologies and its combination with
Cotiviti Holdings, as well as the firm's investment in Truven
Health Analytics. Veritas has a deep understanding of the urgent
need to digitize the healthcare system and brings a culture of
intense customer focus and a drive for growth through focused
R&D and product innovation.
"We are excited by the opportunity to partner with athenahealth,
one of the largest and most connected provider networks in the
nation, to drive outcomes that matter the most to our customers,"
said Bob Segert, Chairman and CEO of
Virence. "athenahealth and Virence have complementary portfolios
and highly-talented people, and this combination expands our depth
and reach across the continuum of care. I'm looking forward to
combining our mission-driven cultures to create an even stronger
healthcare IT company."
athenahealth investor Elliott Management Corporation ("Elliott")
has expressed support for the transaction. Elliott Partner Jesse Cohn said, "We are pleased
to support this transformative transaction combining athenahealth
and Virence, which we believe represents an outstanding,
value-maximizing outcome for athenahealth shareholders."
Upon completion of the transaction, Elliott's private equity
subsidiary, Evergreen Coast Capital, will retain a minority
investment stake in the combined company.
Evergreen Managing Director Isaac
Kim said, "We look forward to taking part in this unique
opportunity. Under Bob's leadership and with Veritas' strategic
oversight and strong track record of value creation, we believe the
combined company will be a true leader in healthcare IT, ideally
positioned to improve outcomes and reduce the cost of
care."
Approvals and Timing
The transaction is expected to
close in the first quarter of 2019, subject to the approval of the
holders of a majority of athenahealth's outstanding shares and the
satisfaction of customary closing conditions and regulatory
approvals.
The athenahealth Board of Directors has unanimously approved the
merger agreement and intends to recommend that athenahealth
shareholders vote in favor of it at a Special Meeting of
Stockholders, to be scheduled as soon as
practicable.
The transaction is not subject to a financing condition.
Cancellation of Q3 2018 Earnings Call
In light of
today's announcement and the pending transaction, athenahealth will
no longer be hosting its previously announced Q3 2018 earnings call
today.
Advisors
Lazard and Centerview Partners are serving as
financial advisors, and Weil, Gotshal & Manges LLP is serving
as legal counsel to athenahealth.
Schulte, Roth & Zabel, LLP is acting as legal counsel to
Veritas.
Deutsche Bank and RBC Capital Markets are acting as financial
advisors to Evergreen, and Gibson, Dunn & Crutcher LLP is
acting as legal advisor.
About athenahealth, Inc.
athenahealth partners with
hospital and ambulatory customers to drive clinical and financial
results. We offer medical record, revenue cycle, patient
engagement, care coordination, and population health services. We
combine insights from our network of more than 120,000 providers
and approximately 117 million patients with deep industry knowledge
and perform administrative work at scale. For more information,
please visit www.athenahealth.com.
About Virence Health
Virence Health Technologies is a
leading software provider that leverages technology and analytics
to help healthcare providers across the continuum of care
effectively manage their financial, clinical, and human capital
workflows. Offering a comprehensive suite of innovative
technology-enabled solutions, Virence aims to improve quality,
increase efficiency, and reduce waste in the healthcare industry.
Learn more at www.virencehealth.com.
About Veritas Capital
Veritas Capital is a leading
private equity firm that invests in companies that provide critical
products and services, primarily technology and technology-enabled
solutions, to government and commercial customers worldwide,
including those operating in the aerospace & defense,
healthcare, technology, national security, communications, energy,
government services and education industries. Veritas seeks to
create value by strategically transforming the companies in which
it invests through organic and inorganic means. For more
information on Veritas Capital and its current and past
investments, visit www.veritascapital.com.
About Elliott and Evergreen
Elliott Management
Corporation manages two multi-strategy investment funds which
combined have approximately $35
billion of assets under management. Its flagship fund,
Elliott Associates, L.P., was founded in 1977, making it one of the
oldest funds of its kind under continuous management. The Elliott
funds' investors include pension plans, sovereign wealth funds,
endowments, foundations, funds-of-funds, high net worth individuals
and families, and employees of the firm. This investment is being
led by Evergreen Coast Capital, Elliott's Menlo Park affiliate, which focuses on
technology investing.
Forward-Looking Statements
This press release
contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended, including
statements regarding management's expectations to advance value
creation across the athenahealth business and to become
healthcare's first platform company; statements regarding
management's expectations for future financial and operational
performance, expected growth, positioning in the market, and
business outlook; statements regarding management's focus on the
execution of our strategic plan and expected outcomes, including
anticipated cost savings, increased efficiencies, streamlined
workflow, margin improvements, and improvements in employee
engagement; statements regarding recently announced changes to the
Company's leadership and governance structure and expected
outcomes. Forward-looking statements may be identified with words
such as "will," "may," "expect," "plan," "anticipate," "upcoming,"
"believe," "estimate," or similar terminology, and the negative of
these terms. Forward-looking statements are not promises or
guarantees of future performance, and are subject to a variety of
risks and uncertainties, many of which are beyond our control,
which could cause actual results to differ materially from those
contemplated in these forward-looking statements. These risks and
uncertainties include: the occurrence of any event, change or other
circumstances that could give rise to the termination of the merger
agreement; the inability to complete the proposed merger due to the
failure to obtain stockholder approval for the proposed merger or
the failure to satisfy other conditions to completion of the
proposed merger, including that a governmental entity may prohibit,
delay or refuse to grant approval for the consummation of the
transaction; risks related to disruption of management's attention
from the Company's ongoing business operations due to the
transaction; the effect of the announcement of the proposed merger
on the Company's relationships with its customers, operating
results and business generally; the risk that the proposed merger
will not be consummated in a timely manner; exceeding the expected
costs of the merger; our ability to successfully implement our
strategic initiatives and achieve their anticipated impact; our
ability to manage changes in our management team and changes
resulting from our workforce reduction and office closures; our
highly competitive industry and our ability to compete effectively
and remain innovative; the development of the market for
cloud-based healthcare information technology services; changes in
the healthcare industry and their impact on the demand for our
services; our ability to successfully recruit qualified new
executive talent and to manage our management transition; our
ability to maintain consistently high growth rates due to
lengthening customer sales cycles and lower utilization; the impact
of changes in our business model and structure; our ability to
successfully implement operational and leadership initiatives; our
ability to effectively manage our growth; our ability to protect
our intellectual property; current and future litigation, including
for intellectual property infringement; our dependence on
third-party providers; risks and costs associated with our
worldwide operations; our ability to attract and retain
highly-skilled employees; our fluctuating operating results; our
ability to retain our customers and maintain customer revenue; our
tax liability; our variable sales and implementation cycles; the
timing at which we recognize certain revenue and our ability to
evaluate our prospects; defects and errors in our software or
services, or interruptions or damages to our systems or those of
third parties on which we rely; a data security breach; limitations
on our use of data; the effect of payer and provider conduct; the
failure of our services to provide accurate and timely information;
changing government regulation and the costs and challenges of
compliance; the potential for illegal behavior by employees or
subcontractors; and the price volatility of our common stock.
Forward-looking statements speak only as of the date hereof and,
except as required by law, we undertake no obligation to update or
revise these forward-looking statements. For additional information
regarding these and other risks faced by us, refer to our public
filings with the Securities and Exchange Commission ("SEC"),
available on the Investors section of our website at
www.athenahealth.com and on the SEC's website at www.sec.gov.
Additional Information and Where to Find It
This
filing may be deemed solicitation material in respect of the
proposed acquisition of the Company by Veritas. In connection with
the proposed merger, the Company will file with the SEC and furnish
to the Company's stockholders a proxy statement and other relevant
documents. This filing does not constitute a solicitation of any
vote or approval. Stockholders are urged to read the proxy
statement when it becomes available and any other documents to be
filed with the SEC in connection with the proposed merger or
incorporated by reference in the proxy statement because they will
contain important information about the proposed merger.
Investors will be able to obtain free of charge the proxy
statement and other documents filed with the SEC at the SEC's
website at http://www.sec.gov. In addition, the proxy statement and
our annual reports on Form 10-K, quarterly reports on Form 10-Q,
current reports on Form 8-K and amendments to those reports filed
or furnished pursuant to section 13(a) or 15(d) of the Securities
Exchange Act of 1934 are or will be available free of charge
through our website at www.athenahealth.com as soon as reasonably
practicable after they are electronically filed with, or furnished
to, the SEC.
The directors, executive officers and certain other members of
management and employees of the Company may be deemed
"participants" in the solicitation of proxies from stockholders of
the Company in favor of the proposed merger. Information regarding
the persons who may, under the rules of the SEC, be considered
participants in the solicitation of the stockholders of the Company
in connection with the proposed merger will be set forth in the
proxy statement and the other relevant documents to be filed with
the SEC. You can find information about the Company's executive
officers and directors in the definitive proxy statement on
Schedule 14A in connection with athenahealth's 2018 Annual Meeting
of Shareholders, filed with the SEC on April
26, 2018.
athenahealth Contacts:
Investors
Dana
Quattrochi
investorrelations@athenahealth.com
617-402-1329
Media
John Fox
media@athenahealth.com
617-402-8001
Barrett Golden / Nick Lamplough / Scott
Bisang
Joele Frank, Wilkinson Brimmer
Katcher
212-355-4449
Virence/Veritas Capital Contacts:
Andrew Cole/ David
Millar / Julie Rudnick
Sard Verbinnen & Co
(212) 687-8080
virence-svc@sardverb.com
Elliott Management Corporation/Evergreen Coast Capital
Contacts
Stephen Spruiell
(212) 478-2017
sspruiell@elliottmgmt.com
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SOURCE athenahealth, Inc.