Athenahealth Acquires Epocrates for $293 Million

1-7-2013 9-49-12 PM

Athenahealth agrees to terms on a $293 million blockbuster deal to acquire Epocrates. The deal represents a 22 percent premium over Epocrates’ closing stock price on Friday.

Athenahealth has set a corporate goal of growing its physician customer base from just over 38,000 to 100,000. CEO Jonathan Bush has been taking flack from Wall Street stock analysts for the aggressive spending practices he has exercised in pursuit of this goal. Although the Epocrates acquisition represents another expensive venture, it will certainly help position Athenahealth to close in on this goal. Epocrates boasts more than 1 million physician end users, which represents more than 50 percent of all US–based physicians.

With this acquisition, Athenahealth now has a massive audience to promote its services. In addition to growing its market presence, Athenahealth has announced that it will focus on:

  • Introduce new mobile apps that provide better information access for health organizations.
  • Pioneer new mobile workflows to improve efficiency and support care delivery. Early efforts will focus on care coordination, provider-to-provider communication, and patient engagement tools.

The deal follows Epocrates’ first profitable year since its February 2011 IPO. The IPO closed at just under $23 after which the stock declined for 11 straight months, shedding sixty-seven percent of its value in the process. By the start of 2012, Epocrates was trading for seven dollars per share. However, the company went through a series of strategic and executive changes during 2012, and booked 13 percent growth on the year. More importantly, Epocrates was able to maintain its loyal user-base throughout the turmoil.

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