What happened
Shares of NextGen Healthcare (NXGN) were up more than 14% as of 12:30 p.m. on Wednesday after the healthcare company agreed to a buyout offer from private equity firm Thoma Bravo. The stock is down more than 79% this year.
So what
NextGen focuses on providing cloud-based healthcare technology solutions, including electronic health records.
The agreement is for Thoma Bravo to buy out NextGen at $23.95 per share, 46% over the company's closing stock price on Aug. 22, the last day before word of the transaction got out. After the $1.6 billion deal is completed, NextGen will become a privately held company. This will happen in the fourth quarter, pending approval from shareholders and regulators. The all-cash deal is not subject to financing conditions.
Now what
The company has been reeling since it agreed in July to pay $31 million to settle claims that it overstated the abilities of its software and paid clients kickbacks to recommend its products. The settlement stemmed from a whistleblower lawsuit from two clients who used the company's software while working for the South Carolina Department of Corrections.
The company reported fiscal 2024 first-quarter revenue of $178.2 million, up 16.2% year over year. It also showed an improvement in profitability, with earnings per share coming in at $0.24, compared to $0.16 in the same quarter a year ago. It also boosted its annual guidance to say it expects yearly revenue of between $714 million and $722 million, up from an earlier estimate of between $712 million and $722 million.
