Thoma Bravo to acquire NextGen Healthcare

December 2023 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

December 2023 Issue

In a move designed to accelerate its growth and innovation as a trusted adviser to healthcare providers, healthcare software provider NextGen Healthcare, Inc. is to be acquired by private equity (PE) firm Thoma Bravo for $1.8bn, including debt.

Under the terms of the agreement, NextGen Healthcare shareholders will receive $23.95 per share in cash. The per share purchase price represents a 46.4 percent premium to the company’s unaffected closing stock price on 22 August 2023 and a 39.2 percent premium to the 30-day volume-weighted average price for the period ending 1 September.

A leading provider of innovative healthcare technology solutions, NextGen Healthcare reimagines ambulatory healthcare with award-winning solutions that enable high-performing practices to create healthier communities. The company partners with medical, behavioural and oral health providers in their journey toward whole person health and value-based care.

Upon completion of the transaction, NextGen Healthcare’s common stock will no longer be listed on any public stock exchange and the company will become privately held.

“Under the terms of the agreement, NextGen Healthcare shareholders will receive significant immediate cash value for their shares,” said David Sides, president and chief executive of NextGen Healthcare. “In addition, with Thoma Bravo as a partner, the company will benefit from increased capital, expertise and strategic flexibility to accelerate the company’s leadership in providing healthcare technology solutions.”

The transaction has been unanimously approved by the NextGen Healthcare board of directors.

“The agreement with Thoma Bravo validates NextGen Healthcare’s substantial strength and follows interest in the company by many parties,” added Jeffrey H. Margolis, chair of the NextGen Healthcare board of directors. “It is the result of a deliberate process to maximise shareholder value and best position NextGen Healthcare for continued growth and success. The agreement delivers significant cash value to our shareholders and creates exciting opportunities for NextGen Healthcare’s employees and clients.”

One of the largest software investors in the world with more than $131bn in assets under management, Thoma Bravo, through its private equity, growth equity and credit strategies, invests in growth-oriented, innovative companies operating in the software and technology sectors.

Over the past 20 years, the firm has acquired or invested in more than 440 companies representing over $250bn in enterprise value. The firm has offices in Chicago, London, Miami, New York and San Francisco.

“NextGen Healthcare’s mission-critical electronic medical record (EMR) software and surround solutions are the backbone of ambulatory practices across the US,” said A.J. Rohde, a senior partner at Thoma Bravo. “We are so proud to be working with NextGen Healthcare in its next phase as a private company and look forward to continued product innovation to better support NextGen Healthcare’s thousands of highly-valued customers.”

The transaction is expected to close in the fourth quarter of 2023, subject to customary closing conditions, including approval by NextGen Healthcare shareholders and the receipt of required regulatory approvals. The transaction is not subject to a financing condition.

Acting as financial adviser to NextGen Healthcare is Morgan Stanley & Co. LLC, with Latham & Watkins LLP acting as legal adviser. William Blair & Company is acting as financial adviser to Thoma Bravo, with Goodwin Procter LLP acting as legal adviser.

“Thoma Bravo has a 20-plus year record of investing in premier companies in the software and technology sectors,” concluded Mr Sides. “We look forward to joining forces to deliver on our mission of better healthcare outcomes for all.”

Fraser Tennant