Tags: webmd | private | medscape | kkr | health sites

WebMD Private-Bound With Medscape to KKR Health Sites

Image: WebMD Private-Bound With Medscape to KKR Health Sites
From a page on WebMD site on Monday. (screengrab)

Monday, 24 Jul 2017 01:39 PM

WebMD is private-bound, along with Medscape, both joining a slew of popular online health information websites under the umbrella of private equity firm KKR & Co in a deal valued at about $2.8 billion.

The deal comes five months after New York-based WebMD said it would explore strategic options amid a slowdown in advertising paid for by pharmaceutical companies, reported Reuters.

KKR will fold WebMD's websites, including WebMD.com and Medscape.com, into its Internet Brands unit, which houses sites such as DentalPlans.com and AllAboutCounseling.com.

KKR will pay $66.50 per share, a premium of 20.5 percent to WebMD's Friday closing and 33 percent higher than the stock's trading price at the start of the year.

WebMD's shares were trading at $65.98, just shy of the offer.

Analysts said the deal price was higher than expected, adding that WebMD was a good fit for Internet Brands' portfolio.

"We are pleasantly surprised by the premium valuation, given the flat growth expected," Cowen & Co analyst Charles Rhyee wrote in a note. "We think the valuation may imply that we and consensus may be too conservative."

Founded in 1996, WebMD has grown into one of the most popular health websites for consumers and medical professionals, attracting more than 70 million monthly unique visitors in 2016, according to analytics company comScore Inc.

WebMD's Medscape, a medical news and education website, accounted for about 60 percent of the company's advertising revenue in 2016.

Internet Brands, which launched as CarsDirect.com in 1998, licenses and delivers its content and internet technology products and services to small and medium-sized businesses.

It was acquired by KKR in 2014 for $1.1 billion from two other private equity firms, Hellman & Friedman LLC and JMI Equity.

Reuters reported on Sunday that KKR was nearing a deal to buy the online health information provider.

WebMD also announced preliminary second-quarter sales that topped the average analyst estimate.

The strong results highlight a rebound in regulatory drug approvals in the United States and Europe so far this year, KeyBanc Capital Markets analysts said.

"This is driving biopharma advertising demand and provides a positive read going into the second quarter reporting season for companies linked to the marketing of newly approved drugs."

© 2017 Thomson/Reuters. All rights reserved.

 
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WebMD is private-bound, along with Medscape, both joining a slew of popular online health information websites under the umbrella of private equity firm KKR & Co in a deal valued at about $2.8 billion.
webmd, private, medscape, kkr, health sites
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2017-39-24
Monday, 24 Jul 2017 01:39 PM
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