Bain, Hellman & Friedman agree to buy Athenahealth mega-deal, Blackstone closes next GP stakes fund

Bain and Hellman & Friedman agrees to buy Athenahealth while Blackstone racks up $5.6 billion for fund.

Happy Tuesday!

Giant deal for ya just before Turkey Day: Bain Capital (including its tech-focused fund) and Hellman & Friedman agreed to buy electronic health record company Athenahealth in a deal valued at around $17 billion. The firms will buy the company from Veritas Capital and Evergreen Coast Capital, a subsidiary of Elliott Management.

Veritas and Evergreen took Athenahealth private in a deal valued at about $5.7 billion in 2019, meaning the firms are looking at a tremendous return after a hold of under three years. For Veritas, the exit translates to a 10x return, according to a person with knowledge of the situation.

The buyer group includes, along with the two primary sponsors, Veritas Capital and Evergreen, which will retain minority stakes in the company — a pretty routine move these days as firms look to keep a hook in growing businesses.

Other co-investors into the deal include Singapore’s sovereign fund GIC as well as a subsidiary of Abu Dhabi Investment Authority.

Veritas, as part of its initial buyout, combined healthcare assets the firm acquired from GE in 2018, which it rebranded as Virence Health, with Athenahealth. Read more here on PE Hub.

Stakes: Blackstone raised $5.6 billion for its second GP stakes fund that will continue to mine opportunities, especially in the middle market. Fund II held a final close in early November, writes Kirk Falconer on Buyouts today.

“This is a really underpenetrated market,” said Mustafa Siddiqui, who leads the GP stakes strategy at Blackstone. “There are thousands of private equity and other alternative asset managers out there. Firms pop up that I’ve never seen before.”

In addition to incumbent PE brands, Siddiqui said, fresh targets include emerging managers appearing with “increasingly large entry sizes.” Such first-timers are “squarely within scope.”

Blackstone GP Stakes operates with “a wide angle,” Siddiqui said, taking in large and mid-cap players across a range of asset classes, strategies and geographies. The overriding criterion for partners is that they be “best-in-class firms with hungry teams and depth of leadership.” Read more here on Buyouts.

That’s it for me! Have a great rest of your day. Reach me with tips n’ gossip, feedback or book recommendations at cwitkowsky@buyoutsinsider.com or over on LinkedIn.