Leading vendor of cloud-based services for physician practices
and inpatient settings,
) recently reported that it has concluded the purchase of the
Watertown 'Arsenal on the Charles' from Harvard University. The
Arsenal on the Charles is a large multiple building business
property spread across 29 acres. It is situated just 10 miles
The Arsenal on the Charles is recognized as a historical site.
It has 11 buildings first built over 200 years ago. The complex
has served as the company headquarters since 2005.
The deal is valued at $168.5 million. The property will ensure
that the company has the ability to grow in the health care
ATHN used a fresh $325 million senior bank facility of five
years duration to fund its purchase of the Arsenal on the
Charles. It comprised of $125 million of unsecured revolving
credit and $200 million term loan availability. The latest credit
arrangement will take the place of Athenahealth's present
revolving credit arrangement. One of the joint main arrangers was
Bank of America Corporation
Athenahealth's web-based deployment provides a low-cost
scalable service while its flexible rules engine leads to higher
efficiency in claims settlement. The Software-as-a-Service
(SaaS)-based approach allows for a more flexible delivery
mechanism that helps Athenahealth win deals. The company has
traditionally enjoyed high customer satisfaction rates, which
facilitates a larger number of referrals.
Athenahealth's unique business model makes it a strong
provider of RCM services (athenaCollector) designed for small
physician practices. Its EHR product (athenaClinicals) is a key
player in ambulatory settings. We believe that sales of
athenaClinicals are likely to remain robust. In addition, the
company will harness its newer products, namely
athenaCommunicator and athenaCoordinator.
Athenahealth should benefit from its extensive athenaCollector
client base, as only a minority of its subscriber base also
utilizes athenaClinicals. Cross selling represents a real growth
opportunity in the near term. In this regard, Athenahealth has
made rapid strides in capturing the EHR business of physician
practices. However, this segment is shrinking, as hospitals
increasingly absorb physician's medical practices.
Athenahealth is geared to establish itself in the enterprise
segment. The company has recently signed on, and executed several
enterprise-sized deals, which provide it with a credible and
referenceable client base. In Mar 2013, Athenahealth completed
the take over of Epocrates, a provider of point-of-care digital
solutions in the healthcare industry. The acquisition will enable
Athenahealth to increase its user network and improve its brand
Though fresh opportunities are shrinking, the replacement
market has been growing. Competition is fierce and larger
competitors may benefit from the incumbency factor. Industry
stalwarts such as
) offer long-standing seamless products which integrate inpatient
and ambulatory-care systems.
We currently have a Zacks Rank #3 (Hold) on the company.
However, we are more positive about other stocks such as
Merge Healthcare Incorporated
) which carries a Zacks Rank #2 (Buy) and is expected to do
ATHENAHEALTH IN (ATHN): Free Stock Analysis
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