Is a takeover of athenahealth inevitable?
Since the news broke May 18 that investment firm Elliott Associates scooped up a nearly 10 percent share in athenahealth, rumors have been rampant that its founder and well-known activist investor Paul Singer may be eyeing the cloud-based healthcare technology vendor as its next big deal. And that likely means a sale or merger.
“Athenahealth is an attractive target, especially at its current valuation -- a discount to other software companies that are growing at a similar pace,” according to a piece by columnists Max Nisen and Gillian Tan that appeared in Bloomberg.
Athenahealth posted a net loss of $1.4 million for the first quarter 2017. What’s more, rival Epic Systems is apparently taking aim at athenahealth’s market position with the two forthcoming lower-cost versions of its EHR that Epic CEO Judy Faulkner revealed at HIMSS17 in February.
“Athenahealth’s time as a public company has been marked by extreme volatility and frequent disappointment,” the columnists said.
They listed Cerner, IBM, insurer giants UnitedHealth Group and Aetna, and even Epic as several possible suitors.
But just about a year ago, Epic founder and CEO Faulkner told Healthcare IT News she was not inclined to acquire companies or technology, preferring to build from scratch. She wanted to avoid the growing pains of acquiring and then trying to integrate companies and technologies. Though, these kinds of things can and do at times change.
“Elliott has made a cottage industry of prodding underperforming software companies into action, including outright sales,” the Bloomberg authors said. “If that's the game plan here, then Athenahealth shouldn't have too much trouble finding a buyer.”