NextGen Healthcare acquired for $1.6B

NextGen Healthcare, Inc., an EHR vendor headquartered in Atlanta, has announced its acquisition by private equity firm Thoma Bravo in a deal that values the company at just over $1.6 billion.  The deal is expected to close toward the end of 2023. 

“The agreement with Thoma Bravo validates NextGen Healthcare’s substantial strength and follows interest in the company by many parties,” said NextGen Chairman Jeffrey Margolis in a press release. “The agreement delivers significant cash value to our shareholders and creates exciting opportunities for NextGen Healthcare’s employees and clients.” 

NextGen has been in the healthcare industry in one form or another since 1973. Originally formed as a dental software company, the corporation has since morphed into one of the leading EHR vendors that has played a major role in the digitization of healthcare. 

NextGen was among the first class of EHR vendors to achieve meaningful use certification at the start of the EHR Incentive programs, allowing users to secure incentive dollars for beginning their digital modernization journey.    

Along the way, it has acquired competitors and supplementary technology vendors including Practice Fusion, Medfusion, and Mirth Connect. Now, it’s NextGen’s turn to experience an acquisition, which the company’s Board of Directors unanimously approved. 

“Under the terms of the agreement, NextGen Healthcare shareholders will receive significant immediate cash value for their shares. 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,” said David Sides, President and Chief Executive Officer of NextGen Healthcare. “Thoma Bravo has a 20+ year record of investing in premier companies in the software and technology sectors. We look forward to joining forces to deliver on our mission of Better Healthcare Outcomes for All.” 

The acquisition means that NextGen will join a growing number of EHR vendors that are in privately held hands. Most notably, market leaders Epic Systems and MEDITECH are both privately held. And in 2021, private equity firms Hellman & Friedman LLC and Bain Capital acquired Athenahealth for $17 billion. 

The NextGen deal is part of an ongoing trend of large-scale mergers and acquisitions in the health IT space. In 2021, Microsoft doled out $16 billion to acquire Nuance Communications; Oracle recently rocked the industry with its $28.3 purchase of Cerner Corporation; and Amazon’s lengthy health IT buying spree has the potential to reshape the “phygital” health landscape over the next few years. 

For NextGen, the change in ownership is designed to best position the company “for continued growth and success,” said Margolis.   

Representatives from Thoma Bravo also expressed excitement for the company’s next steps under new ownership. 

“We have followed 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, a Vice President at Thoma Bravo. “We look forward to partnering with the NextGen Healthcare team to further accelerate product investments to better support the increasingly complex needs of ambulatory providers and ultimately improve patient outcomes.” 

Jennifer Bresnick is a journalist and freelance content creator with a decade of experience in the health IT industry.  Her work has focused on leveraging innovative technology tools to create value, improve health equity, and achieve the promises of the learning health system.  She can be reached at jennifer@inklesscreative.com.