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November 13, 2018

Athenahealth, with 950 workers in Belfast, to be sold for $5.7B cash

Courtesy / GE and LinkedIn
Courtesy / GE and LinkedIn
Athenahealth Inc. (NASDAQ: ATHN), one of Waldo County's largest employers with 950 workers at its Belfast offices, announced Monday it had entered an agreement to be acquired by private-equity firm Veritas Capital and Elliott Management Corp. for $5.7 billion in an all-cash transaction. Shown here are athenhealth's Executive Chairman Jeff Immelt, left, and Virence Chairman and CEO Bob Segert, who will lead the new company and an executive leadership team comprised of executives from both companies.

Athenahealth Inc. (NASDAQ: ATHN), one of Waldo County's largest employers with 950 workers at its Belfast offices, announced Monday it had entered an agreement to be acquired by private-equity firm Veritas Capital and Elliott Management Corp. for $5.7 billion in an all-cash transaction.

The Belfast Republican Journal reported that Athenahealth's Belfast offices were closed on Monday for the federal holiday, but the newspaper was able to speak with two employees (who did not want their names to be used), who said the announcement was creating uncertainties among the Belfast workers about what might happen after the sale closes in early 2019.

Under the terms of the agreement, athenahealth shareholders will receive $135 in cash per share, according to the news release announcing the sale. The per-share purchase price represents a premium of approximately 12% over the company's closing stock price on Nov. 9, the last trading day prior to Monday's announcement, and a premium of approximately 27 % over the company's closing stock price on May 17, 2017, the day prior to Elliott Management Corp.'s announcement that it had acquired an approximate 9% interest in the company.

Following the closing, Veritas and Evergreen Coast Capital, a subsidiary of Elliott Management Corp., expect to combine athenahealth with Virence Health, the GE Healthcare Value-based Care assets that Veritas acquired earlier this year. The combined business is expected to be a leading, privately-held health care 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.

The combined company is expected to operate under the athenahealth brand and be headquartered in Watertown, Mass. It will be led by Virence Chairman and CEO 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," athenhealth's Executive Chairman Jeff Immelt said in the news release. "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."

Ramzi Musallam, CEO and Managing Partner of Veritas Capital, described athenahealth as a "market leader and a natural and strategic fit with Virence."

"Virence and athenahealth have differentiated and complementary solutions, deep relationships with their respective customer bases and a shared culture of commitment to innovation," he said. "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 Segert and the team build the future of health care IT."

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 yet-to-be-scheduled special meeting of stockholders.

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