PE firms Bain and H&F to buy Athenahealth in US$17b deal

[NEW YORK] Bain Capital and Hellman & Friedman have agreed to buy health-care technology company Athenahealth Inc in a US$17 billion deal.

The sale is expected to be completed in the first quarter of 2022, subject to regulatory approvals and customary closing conditions, Athenahealth said Monday (Nov 22) in a statement. No further financial terms were given.

The private equity firms will take control of privately held Athenahealth from Veritas Capital and Elliott Investment Management, who bought it for about US$5.7 billion in 2018.

Athenahealth helps doctors and hospitals collect money from health insurers and the government for services they provide. It also has an electronic health records service that helps providers manage workflow and document patient visits, among other services.

The deal comes as multiples in health-care IT are booming. The coronavirus pandemic accelerated the need for health systems to adopt digital technologies to manage their businesses and analyse data.

US provider groups and hospitals are facing more pressure to watch their bottom lines after the pandemic caused many potential patients to delay procedures, wiping out billions of dollars of revenue. That has increased demand for services from companies like Athenahealth.

Companies are also rushing to complete large buyouts while debt still looks cheap. US junk bond sales set an annual record in November, with borrowers looking to lock in low coupons before the Federal Reserve eventually raises interest rates. Sales of leveraged loans are booming as well, with private equity firms taking advantage of intense demand for the debt to finance M&A activity and dividends.

Health-care technology companies have announced at least US$56 billion of deals so far this year, up from US$9 billion last year, according to data compiled by Bloomberg.

BLOOMBERG