Private Equity Firms Acquire Athenahealth for $17 Billion

Athenahealth, an established provider of electronic health records and digital healthcare platforms, has been acquired by a pair of private equity firms, the latest evidence of the rapid growth of cloud-based services in the wake of the pandemic.

Athenahealth, a longtime stalwart in the healthcare IT space, is being acquired by a pair of private equity firms.

Bain Capital Private Equity, Bain Capital Tech Opportunities, and Hellman & Friedman LLC are joining forces to purchase the Watertown, MA-based developer of enterprise-based cloud software solutions for physician practices for $17 billion.

“athenahealth is at the frontier of digital health in the United States, enhancing the clinical quality, operational efficiency, and delivery of preventive care to nearly 20 percent of the population today, unlocking the front door of the consumer healthcare journey and positioning the Company to support physicians in the continuing shift towards value-based care,” Devin O’Reilly, a managing director at Bain Capital Private Equity, said in a press release.

Launched in 1997 by Johnathan Bush and Todd Park as Athena Women’s Health, a women’s health and birthing center, the company took off two years later when Bush and Park pivoted to focus on digitizing medical data, beginning with claims data. The pair changed the company’s name to athenahealth and, in 2000, unveiled the athenaCollector platform.

The company debuted its first electronic medical records platform, athenaClinical, in 2006, then debuted the athenaCommunicator communications platform in 2008. In 2018, it was acquired by Elliott and Veritas Capital for $5.7 billion and taken private, then merged with Virence Health, a software company acquired by Veritas from General Electric.

Company officials say the athenaOne platform is used by more than 140,000 ambulatory care providers across more than 120 specialties. It includes modules for a wide array of services, including revenue cycle management, telehealth, patient engagement, population health management and value-based care management.

The acquisition points to the growing value of healthcare IT companies that specialize in cloud-based services, including telehealth. The healthcare industry saw a surge in online and virtual services during the pandemic, when health systems shifted from in-person to virtual care and consumers sought more healthcare services online. That trend is expected to continue as the nation shifts to a hybrid model that balances in-person and virtual care and gives consumers more options.

“Given our deep experience in software and healthcare, we are excited to work with Bob and the executive team to rapidly scale the business and continue to innovate and grow alongside our most disruptive and innovative ambulatory care clients to build the foundations of a multi-sided digital care network between patient, payer, and provider,” Allen Thorpe, a partner at Hellman & Friedman, added in the press release.