Finding a healthcare company with the right technological know-how can be an attractive investment opportunity. That’s the thinking behind a move announced this morning by activist investor Elliott Associates, which bought a 9.2 percent stake in Boston-area health IT company Athenahealth (NASDAQ: [[ticker:ATHN]]).
The news sent Watertown, MA-based Athenahealth’s stock up more than 22 percent to $130.21 per share as of 2:52 p.m. in New York. Elliott, run by hedge fund manager Paul Singer, believes the company’s shares were undervalued, according to a regulatory filing.
Athenahealth offers a variety of tech-enabled services to hospitals and outpatient care centers, including electronic health record services, patient engagement and care devices, and mobile apps. In August, Athenahealth acquired a company called Filament Labs for $15.2 million, an Austin, TX, startup that does business as Patient IO, the name of its patient-focused software app. The services aims to help healthcare providers encourage patients to follow a healthcare plan they might receive after visiting a doctor or hospital. Athenahealth has been building its health IT market share through acquisitions for years, such as its deal to buy RazorInsights in 2015.
Athenahealth, which went public in 2007, reported $1.08 billion in revenue for 2016, a 17.1 percent increase over the previous year. Net income was $21 million in 2016, up 50 percent year over year.
Elliott’s other investments have been more broadly tech focused, however. Bloomberg reported that Elliott recently “waged campaigns” on tech companies including Gigamon, EMC, Citrix Systems, CDK Global, Mitel Networks, NetApp, and Juniper Networks.
