WebMD Health Corp. (NASDAQ: WBMD), from Friday’s close, jumped up over 19% in open on Monday after Internet Brands announced to purchase the site. WebMD, which one of the largest sites for health-related information, was confirmed to be purchased by Internet Brands, which is owned by Kohlberg Kravis Roberts, for $66.50 a share or $2.8 billion in cash.
This deal came after WebMD announced back in February that it would explore into other strategic options, which including selling off the site.
This deal brings a sale process that has been ongoing for a while now and reportedly saw roughly over a 100 different bids to obtain the health informational site.
It will join a company that is now focused on being an information storage, which can also serve as a directory and other services.
WebMD was one of the earlier search portals for health related information on the Internet. It was founded back in 1996 and went public in 2005. WebMD brought in $705 million in revenue in 2016. Internet Brands combines a wide variety of sites, which it in turns monetises by way of an advertising network, but also provides a large quantity of services to help customers find health services and vice versa.
WebMD ranked 36th in comScore’s top 50 website in the US in June. It reported 71.7 million unique visitors clicked in last month, and also it was the only medical/health related site that made that list.
“WebMD and Medscape [a WebMD property] are the market leaders in online health with unparalleled reach to consumers and healthcare professionals,” said Bob Brisco, CEO of Internet Brands, in a statement. “Since its founding, WebMD has established itself as a trusted resource for health information. We look forward to delivering that resource to even more users, by leveraging our combined resources and presence in online healthcare to catalyze WebMD’s future growth.”
WebMD has built up an impressive base of search engine users who used the site in order to find health related topics, but is still in a very competitive space, so its plan is to strengthen itself.
“After a thorough review of strategic alternatives, we are pleased to announce this transaction, which provides our stockholders with immediate and significant cash value and a substantial premium,” said Martin J. Wygod, Chairman of WebMD, in a statement. “Throughout this process, our Board has conducted diligent analysis and thoughtful deliberations. WebMD and its financial advisors had a process that involved outreach to more than 100 strategic and financial parties, and we are confident that this transaction maximizes value for our stockholders.”
“We believe that this transaction will provide additional flexibility and resources to deliver increased value to consumers, healthcare professionals, employers, and health plan participants,” said Steven L. Zatz, M.D., CEO of WebMD, in the statement. “On behalf of everyone at WebMD, I would like to express our sincere appreciation to our employees for their hard work and dedication. I am confident this will be an exciting new chapter for WebMD.”
Internet Brands states that its health vertical properties cover both B2B, with over millions of consumers and over 50,000 health care facilities visiting, using, and paying for its products, which has been built primarily through acquisitions.
Other B2B properties include Officite, Sesame Communications, and Baystone Media, while consumer portals include DentalPlans.com, eHealthForum.com, HealthBoards.com, FitDay.com and VeinDirectory.org.
“KKR and Internet Brands are pleased to be investing behind the experienced WebMD management team and trusted WebMD platforms. The combined portfolio of leading vertical internet assets will be a powerful one,” said Herald Chen, Chairman of Internet Brands, KKR Member and Head of the Technology industry team. “We look forward to supporting and accelerating the growth and global expansion of the businesses.”