Hedge funds aren’t running all the big names in the Boston business community just yet — though it might be starting to feel that way.
Just look at what went down Wednesday at Watertown-based athenahealth. CEO and cofounder Jonathan Bush is out.
Elliott Management’s name didn’t come up in athenahealth’s announcement. But anyone following the company knows Bush wouldn’t be leaving if not for the hedge fund manager’s pressure. Athenahealth initially appeared to be resisting Elliott’s offer to buy the company for about $6.5 billion, a tantalizing figure for the health IT firm’s shareholders. The board really had no other choice in the end than to entertain a sale.
Athenahealth is just the latest public company around here to be disrupted by an activist shareholder. Chairman Jeff Immelt had a run-in with Nelson Peltz and his firm, Trian Fund Management, over the future of his former employer, General Electric. Immelt eventually left while Trian won a seat on GE’s board, and new CEO John Flannery is paring GE down to make it a smaller, more focused conglomerate. Trian has also been pressuring Procter & Gamble, in part over the way it has run Boston shaving giant Gillette.
Biotechs are a frequent target for activist investors: Ironwood Pharmaceuticals’ leadership just agreed to split the company in two while under pressure from Alex Denner and his Sarissa Capital. Denner, a protege of activist investor Carl Icahn, also forced out the CEO of Ariad Pharmaceuticals, and that in turn eventually led to the sale of the company to Japanese pharmaceutical giant Takeda last year.
Elliott, though, may be the busiest of the bunch in the Boston area, with local investments that have included LogMeIn and Iron Mountain. The New York hedge fund firm made waves at EMC, which eventually was sold to Dell for $67 billion, the largest price paid for a tech company in US history.
These relationships aren’t always adversarial: Elliott gets along with management at Boston-based LogMeIn, which grew significantly after merging in 2017 with a business that Elliott had pushed Citrix to sell.
Akamai Technologies, meanwhile, reportedly hired Morgan Stanley to conduct a strategic review, including a possible sale, after Elliott came calling. Akamai has added two new board members as a result — including the CEO of LogMeIn. No deal for the company has materialized yet, so Akamai might stay independent.
Analysts, however, don’t expect the same will be true for athenahealth. They’re already placing bets on who will step up; a report from Piper Jaffray mentioned Microsoft, Oracle, and Salesforce as possible suitors.
Jon Chesto can be reached at jon.chesto@globe.com. Follow him on Twitter @jonchesto.
