Thoma Bravo to Take NextGen Healthcare Private in $1.8 Billion Deal

Editor’s note: Updated with details of the confirmed deal.

Private equity firm Thoma Bravo is buying NextGen Healthcare and taking the company private in a deal that put the value of NextGen at $1.8 billion.

The announcement made Wednesday (Sept. 6) sent NextGen’s stock up $14.48% to $23.53 a share in midday trading. Once the sale is completed this fall, the company’s common stock will no longer be listed, according to the company.

NextGen had interest from several other buyout firms before talks with Thoma Bravo deepened, according to Bloomberg.

In an announcement emailed to PYMNTS, NextGen President and CEO David Sides said, “Under the terms of the agreement, NextGen Healthcare shareholders will receive significant immediate cash value for their shares. In addition, with Thoma Bravo as a partner, the Company will benefit from increased capital, expertise and strategic flexibility to accelerate the Company’s leadership in providing healthcare technology solutions.”

As part of the agreement, NextGen shareholders will get $23.95 per share in cash. Based in Atlanta, NextGen provides cloud-based technology services that health providers use to manage patient records.

Thoma Bravo is an investor in tech companies. Last month, it bought identity and access management software firm ForgeRock in a deal worth $2.3 billion.

The deal is happening as the health sector draws increased attention from investors due to its use of artificial intelligence (AI).

Firms like Andreessen Horowitz, General Catalyst, Menlo Ventures and Lux Capital, are all investing in AI healthcare startups, matching the enthusiasm that tech giants like Google and Amazon have for the field.

Amazon has introduced HealthScribe, an AI tool that helps summarize doctor visits, while Google is testing a medical chatbot in hospitals.

(For its part, NextGen announced last month it was working with Luma Health to offer AI-enhanced solutions for patient communications, such as intake and self-scheduling.)

“Healthcare systems are primed for new technologies to make a literal life-changing impact,” PYMNTS wrote last week.

But fragmentation in the U.S. healthcare landscape could be holding back innovations like generative AI that hold the promise to help patients and providers more effectively manage the entire healthcare journey.

Still, major public healthcare organizations are experimenting with the new technology. For example, CVS Health is making “concerted investments in emerging technology capabilities such as voice, artificial intelligence and robotics to further automate, reduce cost and improve the experience for all of its constituents,” according to a filing with the Securities and Exchange Commission (SEC).