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Exclusive: Healthcare software vendor NextGen explores sale, sources say
Summary
NextGen Healthcare, a provider of software that helps manage patients' records, is exploring options that include a sale of the company. Investment bank Morgan Stanley has been hired to advise on discussions with potential buyers. Shares of NextGen rose 10% on the news, giving the company a market value of about $1.2 billion. Healthcare deals have been increasing in the past year, with private equity firms betting on an industry that has traditionally been resilient in economic downturns. Last month, private equity firm TPG agreed to acquire healthcare information technology platform Nextech for $1.4 billion. NextGen's technology platform helps healthcare providers with various operations, and roughly 90% of the company's revenue in 2023 was recurring. However, its shares have been down 9% year-to-date prior to news of the company exploring a sale, due to its clients trimming spending and dealing with a federal investigation.
Q&As
What company is exploring a sale?
NextGen Healthcare is exploring a sale.
What investment bank has been hired to advise the company?
Morgan Stanley has been hired to advise the company.
What is the current market value of the company?
The current market value of the company is about $1.2 billion.
How has dealmaking in the healthcare sector increased?
Dealmaking in the healthcare sector has increased by 43% from a year ago.
What was the outcome of a recent federal investigation conducted on the company?
The company agreed to pay $31 million to settle claims by U.S. prosecutors that it misrepresented the capabilities of its software and paid users kickbacks to get them to recommend it.
AI Comments
👍 This article provides an in-depth look into NextGen Healthcare's exploration of a potential sale and the potential implications for the healthcare sector. It also brings up interesting points about the healthcare industry's resilience in economic downturns and the recent increase in healthcare deals.
👎 This article briefly mentions the potential fallout of a federal investigation for NextGen Healthcare, but does not go into further detail about it. Additionally, the article does not mention any potential risks or drawbacks of a sale for NextGen Healthcare.
AI Discussion
Me: It's about NextGen Healthcare, a software provider, exploring a sale of the company. They've hired Morgan Stanley to advise them on the process and the company has a market value of about $1.2 billion.
Friend: Wow, that's a lot of money. What are the implications of this article?
Me: Well, this article points to a larger trend of increased dealmaking in the healthcare sector, as companies look to cut costs and gain scale. It also shows that private equity firms are betting on the industry to be resilient in economic downturns. Additionally, the article highlights the potential fallout of NextGen's recent federal investigation, which could impact the company's stock price.
Action items
- Research the healthcare software industry and the competitive landscape to gain a better understanding of the sector.
- Analyze the financials of NextGen Healthcare to determine the company's value and potential buyers.
- Reach out to potential buyers to discuss the potential sale of NextGen Healthcare.
Technical terms
- Exclusive
- An exclusive is a news story or other information that is only available to a limited number of people or organizations.
- Healthcare software vendor
- A healthcare software vendor is a company that develops and sells software specifically designed for the healthcare industry.
- NextGen
- NextGen is a provider of software that helps manage patients' records.
- Morgan Stanley
- Morgan Stanley is an investment bank that is advising NextGen on its discussions with potential buyers.
- Market value
- Market value is the total value of a company's outstanding shares in the stock market.
- Private equity firm
- A private equity firm is an investment firm that specializes in buying and selling companies.
- Healthcare information technology platform
- A healthcare information technology platform is a system that helps healthcare providers with operations such as digitalization of patients' health records and the administration of finances.
- Recurring
- Recurring is a term used to describe revenue that is expected to be generated on a regular basis.
- Kickbacks
- Kickbacks are payments made to someone in exchange for recommending a product or service.
- Misrepresented
- Misrepresented is a term used to describe when someone gives false or misleading information.
- Thomson Reuters Trust Principles
- The Thomson Reuters Trust Principles are a set of standards that guide the company's journalism and business practices.
- Acquire Licensing Rights
- Acquire Licensing Rights is a process of obtaining permission from a copyright holder to use their work.
- Sandwich chain Subway
- Subway is a fast-food restaurant chain that specializes in submarine sandwiches.
- Roark Capital
- Roark Capital is a private equity firm that has agreed to acquire Subway.
- Shein
- Shein is a fast-fashion retailer.
- Forever 21-owner
- Forever 21-owner is a company that owns the fashion retailer Forever 21.
- Paytm
- Paytm is an Indian digital payments company.
- Antfin
- Antfin is a shareholder of Paytm.
- Block deal
- A block deal is a large trade of shares that is executed in one transaction.
- Citi
- Citi is a global bank that has bought a stake in a Peruvian foreign exchange fintech.