Health IT Vendor NextGen to Be Privately Held After Acquisition

Sept. 6, 2023
Publicly traded ambulatory EHR vendor to be purchased by private equity firm Thoma Bravo, which has more than $131 billion in assets under management

NextGen Healthcare Inc. (Nasdaq: NXGN), which provides cloud-based health IT solutions, will become a privately held company after being acquired by private equity firm Thoma Bravo.

NextGen, which has 2,800 employees, offers interoperability tools and ambulatory EHR solutions that can be adapted to different specialties. The company says its platform offers practice management, analytics, revenue cycle management, clearinghouse, patient engagement, and mobile documentation.

Founded in 1974, NextGen earned the top spot in the Practice Management /EMR for small practice segment in the 2022 Best in KLAS report (10 or fewer physicians), and ranked No. 1 in Practice Management solution in the 2022 Best in KLAS report (11-75 physicians) for the fourth consecutive year.

In August, NextGen said it would apply to become a Qualified Health Information Network (QHIN) under the Trusted Exchange Framework and Common Agreement (TEFCA). NextGen says it supports more than 100,000 providers with its ambulatory electronic health records (EHR) and practice management (PM) solutions, as well as one-third of health information exchanges (HIEs) across the country, with interoperability tools. The company is the first ambulatory-focused solutions provider to announce its intention to become a QHIN.

The company’s NextGen Share is a cloud-based solution that provides access to several national interoperability networks, in addition to other key services. NextGen says it facilitates the exchange of tens of millions of health-related documents each month via national network exchanges. It announced earlier this year that NextGen Enterprise was the first complete ambulatory EHR to receive 2015 Edition Cures Update Health IT certification from the ONC.

Under the terms of the purchase agreement, Atlanta-based NextGen Healthcare’s shareholders will receive $23.95 per share in cash, a 46.4 percent premium to the company’s closing stock price on Aug. 22, with the deal valued at approximately $1.6 billion.

“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 CEO of NextGen Healthcare, in a statement.

Sides joined NextGen in 2021. Previously, he served as chief operating officer at virtual care company Teladoc Health.

In a statement, Jeffrey Margolis, chair of the NextGen board of directors, added that many parties were interested in the company and that the deal “is the result of a deliberate process to maximize 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.”

“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, in a statement. “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.”

San Francisco-based Thoma Bravo had over $131 billion in assets under management as of June 30, 2023. Its software portfolio includes more than 75 companies. Other health IT companies in its portfolio include Imprivata, Alma and BlueSight.

The transaction, which was approved unanimously by the NextGen Healthcare board of directors and is not subject to a financing condition, is expected to close in the fourth calendar quarter of 2023.