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Digital well being report (EHR) software program vendor Athenahealth has agreed to be acquired for $5.7 billion by two non-public fairness companies. Veritas Capital and Evergreen Coast Capital — the non-public fairness arm of Elliott Administration — plan to mix Athenahealth with Virence Well being, a former GE Healthcare value-based care (VBC) firm that Veritas acquired for $1 billion in April, per CNBC.
Athenahealth’s income progress has decelerated amid a tumultuous 2018. Demand for Athenahealth’s major software program merchandise has slowed — the agency hovered round 10% year-over-year income progress in every of the primary three quarters of 2018, outpacing expectations however struggling a marked decline from earlier progress charges.
Furthermore, the corporate’s struggled to maintain progress in a market dominated by high EHR distributors like Cerner and Epic, accordi ng to Bloomberg. The corporate was additionally rocked by an unsolicited $7 billion acquisition bid from US hedge fund Elliott Administration in Might, and the June resignation of its former CEO Jonathan Bush amid controversy.
However the acquisition might give Athenahealth the turnaround it wants. Athenahealth might lean on Virence’s companies to ease suppliers’ transition to VBC. The overwhelming majority(79%) of US suppliers have a damaging outlook on VBC, partly as a consequence of being overburdened by the point it takes to make use of EHRs to adjust to data-reporting requirements. Consolidating with Virence might enable Athenahealth to construct out its EHR platform with a set of VBC companies, making its platform extra helpful to healthcare suppliers.
Athenahealth’s struggles are indicative of a broader shift within the well being IT market. As well being techniques start to internalize information and analytics, EHR firms specializing in just some core companies will seemingly be pushed out of the market. Healthcare suppliers are demanding more and more advanced well being IT options, and the profitable gamers will probably be people who put money into ancillary companies and partnerships that present a full suite of options.