Resort living at Athenahealth….
Here at footnoted, we’ve been known to enjoy summer weeks in Maine. Indeed, my screensaver serves as a constant reminder of one particularly nice vacation a few years back on Swan’s Island where the brain behind footnoted got to romp for several hours on a deserted beach. But as much as we like Maine, we don’t like it quite as much as the folks at Athenahealth (ATHN), which filed this 8-K yesterday afternoon disclosing their $7.7 million purchase of Point Lookout, a 396 acre waterfront property which once made Luxist’s Estate of the Day, and which a footnoted tipster promptly brought to our attention. It’s fair to say it was one of the more unusual 8-Ks we’ve seen in nearly 8 years of reading SEC filings.
Indeed, it was the type of filing we would have expected to see in tomorrow’s Friday night dump, once the markets are closed for the holiday weekend and the people who move vast sums of money around are already at the Heliport on E. 34th on their way to the Hamptons. While property sales aren’t all that unusual in the filings, we can’t think of another time when we’ve seen a publicly traded company that is not a hotel group, a REIT or in the property-management business put out an 8-K announcing that it purchased a luxury resort, complete with squash courts and a bowling alley. Just to be clear, Athenahealth focuses on cloud-based solutions for medical practices.
Because it was so unusual, we decided to call the folks at Athenahealth to get some additional perspective, even though we almost always just let the filings speak for themselves. A spokeswoman pointed to this press release which went out last Friday, announcing the deal. The spokeswoman said that the 8-K was mandated by Sec. 10 subsection C of Item 601 under Regulation S-K, which specifies that any purchase of property that is over 15% of fixed assets is considered material. “It’s not material to our financials,” Jennifer Heizer said, adding that while the purchase was “not intuitive, it is an asset for the company that it can use for conferences and a repertoire of events”. Heizer described the purchase as opportunistic and that it made sense because the company, which employs about 300 people in Belfast, Maine, has used the property many times since opening operations in Maine in 2007. “We’ve always had our eye on it.” Athenahealth will continue to operate the property as a resort and the management company that is currently running the property will continue to do so, though Athenahealth events will start to take precedence.
Judging by the tourist video that we saw on YouTube, it does look like a pretty sweet property, especially at this time of year. And $7.7 million for nearly 400 acres, plus 106 cabins and other amenities does seem like a pretty sweet deal. As this article notes, the property had been built by MBNA and then sold off once Bank of America bought the company. (We couldn’t find a single reference to the property in MBNA’s filings however). It was listed for over $26 million and sold to Erickson Retirement Communities for $12 million five years ago, so at least Athenahealth seems to have gotten a good deal. Still, no matter how good the deal, it’s fair to ask the question of whether a company that focuses on making healthcare more efficient really needs to be in the resort business.