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Who Just Bought WebMD for $2.8 Billion in Cash?

Five months after announcing it would explore “strategic alternatives” for maximizing shareholder value, health information site WebMD said today it has agreed to be acquired for $2.8 billion by Internet Brands, a company that offers online content for several key vertical markets.

Founded 19 years ago as CarsDirect.com, Internet Brands is a portfolio company of KKR, a private equity firm whose 1988 leveraged buyout of RJR Nabisco inspired the book (and later the movie), “Barbarians at the Gate.”

Acquired by KKR in 2014, Internet Brands owns a number of online properties focused on the automotive, health, legal, and home/travel markets. Last week, Internet Brands also announced it would acquire the online marketplace DentalPlans.com for an undisclosed sum.


‘Additional Flexibility and Resources’

Under the acquisition agreement with WebMD, a subsidiary of Internet Brands plans to pay $66.50 per share in cash when the deal is completed, most likely during the fourth quarter of this year. That price is around 20 percent higher than WebMD’s closing share price on Friday.

The offer represents a “substantial premium” for the company’s stockholders, WebMD chairman Martin Wygod said in a statement today. Wygod said the company and its advisors reached out to more than 100 strategic and financial parties while exploring its options.

“We believe that this transaction will provide additional flexibility and resources to deliver increased value to consumers, healthcare professionals, employers, and health plan participants,” WebMD CEO Steven Zatz said in the statement. “I am confident this will be an exciting new chapter for WebMD.”


Declining Pharma Ad Revenues

Founded in 1996, WebMD operates a network of health-related portals for consumers and medical professionals. Its public sites include WebMD.com, MedicineNet.com, RxList.com, eMedicineHealth.com, Medscape.com, and WebMD.boots.com. The company also runs the private portal WebMD Health Services, which offers wellness services and information to employers and health…

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