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Watertown’s athenahealth to be bought by New York financial firms, report says

The company’s co-founder and longtime chief executive, Jonathan Bush, had sought to keep control of the company. But prospects for a deal improved after Bush resigned in June.
The company’s co-founder and longtime chief executive, Jonathan Bush, had sought to keep control of the company. But prospects for a deal improved after Bush resigned in June. Kate Rooney/CNBC via AP/File/CNBC via AP

Athenahealth, the Watertown health care software company, has agreed to a $5.5 billion buyout offer from a pair of New York financial firms, Veritas Capital and Elliott Management, according to a news report.

The company has faced more than a year of uncertainty leading up to the decision. Athenahealth has been in the crosshairs of Elliott, a major shareholder whose complaints about sluggish profits led company management to grudgingly put it up for sale.

Reuters, citing sources, reported that a deal was in place for Veritas and Elliott to pay about $135 per share in cash for athenahealth, which makes online-enabled information technology tools for medical offices. A person familiar with the transaction said the news reports were accurate, and an announcement could come Monday morning.

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Athenahealth could not be reached to comment. Veritas and Elliott declined to comment.

The price would be lower than an earlier offer by Elliott, which said in May that it would pay $160 per share, an offer the hedge fund said it valued at nearly $7 billion. Athenahealth ended trading Friday at just over $120 per share.

The company’s cofounder and longtime chief executive, Jonathan Bush, had sought to keep control of the company. But prospects for a deal improved after Bush resigned in June amid revelations about his past, including his admission to a years-old incident of domestic violence.

Jeff Immelt, the former General Electric chief executive who is chairman of the athenahealth board, has played a key role since Bush’s departure.

The saga drew international attention in part because of Bush’s political pedigree and his standing in the industry. He is a cousin of former President George W. Bush, and he had become a charismatic advocate for change in the medical industry.

Bush argued that products like the electronic medical records programs made by athenahealth could improve health care by simplifying doctors’ jobs and giving them more time to focus on patients.

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As Bush left, the company said it was beginning a formal process to explore offers from possible buyers, including Elliott.

Athenahealth said earlier this year that it had about 2,000 employees in the Boston area. It has been a significant player in redevelopment efforts in Watertown, where its campus is at the center of the Arsenal on the Charles development. It is not clear how a sale could affect jobs there.


Andy Rosen can be reached at andrew.rosen@globe.com.