KKR confirms it will buy WebMD for $2.8B in cash
Some consolidation is afoot in the world on health-focused online media properties. Today, WebMD, one of the biggest sites in the world for health-related information — announced that it would be acquired by Internet Brands — the company that is controlled by KKR and owns a large portfolio of B2B and B2C websites in verticals like automotive, health, home, travel and legal — for a $66.50 per share in cash, or $2.8 billion. The news confirms a report from this weekend noting that the deal was on the cards.
The deal brings to a close a sale process that has been going on for some time and reportedly saw some 100 different bids for the health portal.
It will also marry a company that has up to now focused on being an information repository, with businesses that provide directory and other services rooted in more transactions.
WebMD was one of the earlier vertical search portals and information repositories for health information on the Internet, founded in 1996 and going public in 2005. Internet Brands aggregates traffic across a range of sites, which it in turn monetises by way of an advertising network; but it also provides a large number of services to help health businesses find more customers, and for consumers to find healthcare.
WebMD will be a significant contributor to that business model: the company ranked 36th in comScore’s top 50 websites in the US in June, with 71.7 million unique visitors in the month, and was in fact the only site in the medical/health vertical that made the 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 some pretty impressive SEO among consumers who have taken to the internet to try to figure out what ails them and their friends and family, but they are in a hotly competitive space, and so it’s not too surprising to see some consolidation.
Among those who have made some moves on to WebMD’s lawn are none other than Google, which last year started to insert health information directly into its main, flagship search app; Everyday Health; MedicineNet; and portals from specific medical institutions like the Mayo Clinic and the NHS in the UK.
“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 says that today its health vertical properties cover both B2B and B2C interests, with “millions of consumers” and over 50,000 health care practices visiting, using, and paying for its products — much of which has been built through acquisitions (for example, last year it acquired healthcare-focused marketing automation business Demandforce from Intuit).
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.”
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