Two big investors are buying Athenahealth for $5.7 billion

Athenahealth shares soared Monday after the struggling medical billing software maker received a $5.7 billion cash buyout offer

A logo for athenahealth is displayed on a computer Monday, Nov. 12, 2018, in NY.

Private-equity firm Veritas Capital and hedge fund Elliott Management are acquiring U.S. healthcare software maker Athenahealth in a deal worth about US$5.7 billion.

Shares of athenahealth jumped in early trading. One year later, the firm made an unsolicited all-cash bid for athenahealth worth roughly $7 billion, offering to acquire the company at $160 per share. Athenahealth has been facing takeover attempts since at least 2017, when Elliott Management first tried to buy the company.

Athenahealth, whose cloud-based service is used to track revenue from patients, physicians and hospitals, had been under pressure to sell itself from Elliott, which has about a 9% stake in the company.

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A deal for Watertown, Massachusetts-based Athenahealth represents the largest deal to date for Elliott's private equity arm, which is called Evergreen Coast Capital.

In June Athenahealth's founder and CEO Jonathan Bush, a nephew of former U.S. President George H.W. Bush, stepped down following a newspaper report alleging he had assaulted his former wife 14 years earlier.

Athenahealth investor Elliott Management has been critical of the company and offered about $6.5 billion to take it private last spring. On Friday, it reported third-quarter earnings that topped analyst expectations, but its revenue fell short of the average forecast on Wall Street. After the close of that transaction, the combined company will operate under the athenahealth brand and be headquartered in Watertown. Virence Chairman and CEO Bob Segert will lead it. Athenahealth's stock was up almost 10% between market close on Friday and the middle of the trading day Monday.

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