Activist hedge fund Elliott Management and private equity firm Veritas Capital have agreed to acquire athenahealth for $5.5 billion in cash, Reuters reported Sunday night.
Citing people familiar with the matter, Reuters said Elliott and Veritas had agreed to acquire the Watertown-based health IT company for $135 per share. The price is significantly lower than the $160-per-share offer that Elliott first made for the company in May.
Athenahealth (Nasdaq: ATHN) is expected to make a formal announcement on Monday, according to the report. Spokespeople from athenahealth and Elliott were not immediately available for comment Sunday.
Some analysts had suspected that such an announcement might be coming when the company reported earnings on Friday afternoon but didn’t plan an investor call until Monday evening.
Elliott initially disclosed a 9.2 percent stake in the company in May 2017. In May 2018, Elliott made a $6.4 billion offer for athenahealth, and then released letters to the board claiming that a majority of other shareholders supported a sale.
Athenahealth publicly agreed to look into a sale in June after then-CEO and founder Jonathan Bush was forced out of the company following several reports of alleged misconduct against women.
The reported sale on Sunday comes after athenahealth posted a disappointing third-quarter earnings report on Friday. Bookings, or annualized recurring revenue, was down 29 percent year-over-year. Last quarter, bookings were down 5 percent year-over-year.
Analysts suspect that the demand for electronic medical record software is slowing, due to market saturation from the likes of Cerner and Epic.
“While Elliott may be able to take ATHN private, it is unclear to us what they will actually be able to do to cause a resurgence in demand in the electronic medical record market,” said Leerink analysts in an investor note.
