EHR Vendor NextGen Exploring Sale of Company, Sources Say

According to reporting from Reuters, EHR vendor NextGen Healthcare is exploring options that include a sale of the company.

People familiar with the matter told the news outlet that the company has hired investment bank Morgan Stanley to advise it on discussions with potential buyers. The sources, who asked not to be identified because the matter is confidential, noted there is no certainty that NextGen will reach a deal to sell itself.

NextGen and Morgan Stanley did not immediately respond to Reuters' requests for comment.

Following the report on the potential sale of the company, NextGen shares closed with a 10 percent gain in New York, giving the company a market value of about $1.2 billion.

NextGen's health IT helps healthcare organizations with operations ranging from digitalizing patient records to revenue cycle management. Approximately 90 percent of the company's $653.2 million revenue in fiscal year 2023 was recurring.

NextGen shares were down 9 percent year-to-date before reports of the company exploring a sale, underperforming a 32 percent rise in the Nasdaq Composite Index as some of its clients cut back on health IT investments.

The EHR vendor is also dealing with the consequences of a federal investigation.

In July 2023, NextGen agreed to pay $31 million to settle claims that it misrepresented the capabilities of its health IT and paid clients kickbacks to get them to recommend it.

Despite the settlement, NextGen Healthcare maintains its innocence.

“The Company denies that any of its conduct violated the law, and the settlement agreement does not include any admissions of wrongdoing,” a NextGen spokesperson told EHRIntelligence in a statement at the time of the settlement. “This agreement relates to claims from more than a decade ago.”

“The settlement resolves the matter without monitoring or changes to NextGen Healthcare’s products or compliance policies,” they added. “To avoid the distraction and expense of litigation, we believe it is in the best interest of the Company to put this historical matter behind us and keep our attention focused on innovating solutions that enable better healthcare outcomes for all.”