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NextGen sold to venture capital firm
Acquisition follows fine over charges company falsely claimed its software met certification requirements
Healthcare, Inc., one of the nation’s leading manufacturers of electronic health record (EHR) systems, will soon be a privately-held company.
NextGen announced in a news release Wednesday that it was being acquired by Thoma Bravo, a venture capital company known for its investments in software companies. The deal comes shortly after NextGen agreed to pay $31 million to settle charges that it violated the federal False Claims Act and Anti-Kickback Statute.
“With Thoma Bravo as a partner, the company will benefit from increased capital, expertise and strategic flexibility,” NextGen President and CEO David Sides said in the release. “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.”
Peter Hernandez, a vice president at Thoma Bravo said, “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.”
In July, the U.S. Department of Justice issued a complaint charging NextGen with obtaining false certification for its EHR software based on the 2014 criteria issued by the Office of the National Coordinator for Health Information Technology. By doing so, the complaint alleged, NextGen caused buyers of its EHRs to falsely attest that they had complied with the certification requirements and were eligible for incentive payments under the Meaningful Use program.
The company was also charged with giving credits of up to $10,000 to customers whose recommendations of its software led to new sales. The company also gave incentives such as tickets to sporting and entertainment events to induce references and purchases, according to the DOJ.
Under the terms of the Thoma Bravo acquisition agreement NextGen shareholders will receive $23.95 per share in cash, representing a 46.4% premium to NextGen’s closing price on August 22, the last day before published speculation of a potential transaction involving the company. The deal is expected to close in the fourth quarter of 2023.
