The long rumored sale of Watertown-based Athenahealth appears to be a reality, and the company is expected to be merged with another company and remain in town. The healthcare software company, which has its headquarters in the Arsenal on the Charles, has entered into an agreement to be sold for $5.7 billion to private equity firm Veritas Capital and hedge fund Evergreen Coast Capital, the company announced Monday. Evergreen is the private equity arm of Elliott Management, which had a 9 percent stake in the company, according to a report by Reuters on Sunday. The sale is expected to close in the first quarter of 2019, “subject to the approval of the holders of a majority of Athenahealth’s outstanding shares and the satisfaction of customary closing conditions and regulatory approvals,” according to the announcement. The new owners are expected to combine the company with Virence Health, the GE Healthcare Value-based Care assets, which was acquired by Veritas earlier this year.
Jonathan Bush, CEO, president and co-founder of Athenahealth, has stepped down, and the Watertown-based company may be sold, company officials announced Wednesday.
Reports surfaced last week of complaints against Bush acting inappropriate with female employees at an industry, and in late May it was reported that he had physically assaulted his now ex-wife more than a decade ago. Bush is a nephew of former President George H.W. Bush. At the same time, the health care technology company has been the target of activist hedge fund Elliot Management Corp., which made an offer to purchase the company for $160 a share. The fund contends that Athena had been mismanaged. On Wednesday, Athenahealth officials released a statement announcing Bush’s departure.
The intersection where School Street meets Walnut Street and Dexter Avenue will be altered in an effort to control traffic flow and make it easier for pedestrians to cross.
The project – estimated to cost $200,000 to $250,000 – is part of the $25 million in I-Cubed projects that are being funded by Athenahealth in a program in which they partnered with the Town of Watertown and the Mass. Department of Conservation and Recreation. Representatives from the company based in the Arsenal on the Charles, about a block from the intersection, spoke with the Town Council’s Public Works subcommittee on Wednesday night. The biggest change will be adding sidewalk bump outs on the four corners of the intersection, said Steve Boudreau, traffic engineer from Vanasse & Associates – the consultant working with Athenahealth. “The bump outs will make it safer for pedestrians, reducing the crossing distance on Dexter and Walnut,” Boudreau said.
Watertown’s biggest employer and owner of the Arsenal on the Charles complex had big layoffs Thursday and closed offices in other locations. The Boston Business Journal reported that the company laid off 400 people, including some at the Watertown headquarters, and closed offices in San Francisco and Princeton, N.J. The Boston Globe put the layoffs at 500, or 9 percent of the overall workforce. Athenahealth had about 2,300 employees in Watertown. “We do not take the decision to reduce our workforce lightly, but these are necessary changes to enable athenahealth to succeed over the long-term,” the company said in a statement. The job cuts come at the same time that Athenahealth has teamed with the town and the state on a multi-million dollar project based on adding jobs at its Watertown headquarters.
Residents of Charles River Road, and nearby streets, told Town officials that the street has been bombarded with problems in recent months, from construction trucks to speeding cars to people parking on their streets. After residents complained about trucks carrying prefabricated pieces of concrete for the garage being built by Athenahealth, the town created certain routes and times when the deliveries can be made. Residents said they are still being delivered early in the morning. In May, residents brought up their concerns to the Town, saying they did not think that trucks were allowed on Charles River Road, which is a parkway along the river. At a meeting of the Town Council’s Public Works subcommittee, Public Works Superintendent Gerry Mee said the Massachusetts Department of Transportation gave the trucks special permits to use the road.
Athenahealth Chief Financial Officer Karl Stubelis will be stepping down on July 21, 2017 and an interim CFO will take over during the transition, the company announced.
Stubelis will be “pursue other opportunities,” according to the announcement from Athenahealth. John A. “Jack” Kane, a member of the athenahealth Board of Directors and current chair of the Board’s Audit Committee, will serve as interim CFO during the transition. In addition, the Athenahealth Board will reconstitute its Audit Committee and expects to appoint Tom Szkutak as chair, the company announced. Athenahealth will also release its second quarter earning report on July 21. Jonathan Bush, chairman and chief executive officer of Athenahealth, said, “This CFO transition reflects our commitment to ensuring that Athenahealth has world-class leaders to support the Company and our increased scale and scope. We intend to focus our CFO search on leaders who bring a record of operating discipline and value-creating capital allocation.
Jordyn Burger, an 2014 graduate of Olin College who currently works at athenahealth in Watertown, has won a full grant through the Fulbright Program to study how people interact with products. The Olin School of Engineering announced that Burger will be studying Design for Interaction at Delft University of Technology in the Netherlands during her Fulbright year. The goal of the program is to educate designers who understand what people do with and expect from the products they use in everyday life, and who are able to design products appropriate to their needs’ concerns and abilities, according to the the TU Delft website. The Fulbright Program is an international exchange initiative sponsored by the U.S. government that is designed to build relationships between Americans and people in more than 140 countries across the globe to collectively address global challenges and work toward world peace, according to the Fulbright website.
After a marathon session, the Town Council unanimously approved a partnership with Athenahealth and the DCR that will bring $25 million in public infrastructure projects to the area in East Watertown around the company’s campus. The funds to pay for 10 proposed projects come from the state via the I-Cubed program, which creates partnerships between public entities (the Town and the Department of Conservation and Recreation) and a private one (Athenahealth). The money comes from additional taxes created by Athena adding more jobs through its campus expansion, and will be used to pay for bonds issued by the state. The projects must be completed within 3 years of the issuance of the bonds. While many residents and some on the Council said the Town would be crazy to pass up $25 million in free projects (or at least that won’t use Watertown residents’s tax dollars) others complained that the list of projects came forward with little public discussion about what made the list.