NextGen to be acquired by Thoma Bravo for $1.8B
After more than forty years of being a listed healthcare IT company, NextGen Healthcare will shortly be taken private by Thoma Bravo. acquisition worth $1.8 billion, it was announced Wednesday.
WHY IT MATTERS
NextGen, which was in advanced talks with the private equity firm, had also attracted some interest from other candidates, he said. Bloomberg earlier this week.
Jeffrey Margolis, chairman of NextGen Healthcare’s board of directors, confirmed in a statement Wednesday that the deal with Thoma Bravo “affirms the substantial strength of NextGen Healthcare and follows the interest of many parties in the company.”
“With Thoma Bravo as a partner, the company will benefit from increased capital, expertise and strategic flexibility to accelerate the company’s leadership in delivering healthcare technology solutions,” said David Sides, president and CEO of NextGen.
Peter Hernandez, vice president at Thoma Bravo, said the company will “further accelerate product investments to better support the increasingly complex needs of ambulatory care providers and ultimately improve patient outcomes.”
The transaction is expected to close in the fourth calendar quarter of 2023, subject to customary closing conditions, including approval by NextGen Healthcare shareholders and the receipt of required regulatory approvals.
Shareholders are expected to receive $23.95 per share in cash – a 46.4% premium over the unchanged share price.
THE BIG TREND
NextGen has a long history in the healthcare IT sector. It was founded in 1973 by Sheldon “Shelly” Razin as Quality Systems, Inc., which went public in 1982. NextGen became a subsidiary of QSI in 2001 after twenty years of various acquisitions (with more acquisitions and partnerships in subsequent years). ).
In 2021, Razin, who passed away earlier this yearnominated four new candidates to the company’s board of directors in an effort to improve the company’s “years of poor performance” and “stagnation”.
Shares had fallen to 18% that year – even as outpatient EHR and PM products continued to earn high marks at organizations like KLAS – so Razin, along with fellow director Lance Rosenzweig, wrote to stakeholders about the “imperial boardroom culture” that ruled over by Margolis.
Last July, NextGen paid $31 million in a settlement with the Justice Department over alleged violations of the False Claims Act. The DOJ said the electronic health record vendor misrepresented “the capabilities of certain versions of its EHR software.”
The company said Healthcare IT news that it denied “that any of its conduct was contrary to law,” and that the settlement did not imply an admission of wrongdoing for “claims dating back more than a decade.”
ON THE RECORD
“NextGen Healthcare’s mission-critical (EHR) software and surround solutions are the backbone of ambulatory practices in the United States,” said AJ Rohde, senior partner at Thoma Bravo, in a statement.
“We have been following NextGen Healthcare’s impressive business transformation for many years and are excited to apply Thoma Bravo’s strategic and operational expertise to drive continued growth and innovation,” said Peter Hernandez.
Andrea Fox is editor-in-chief of Healthcare IT News.
Healthcare IT News is a HIMSS Media publication.