Months after WebMD Health Corp announced that it was exploring strategic options, reports revealed on Monday that the company will be bought out by private equity firm KKR & Co for a value of around $2.8 billion.
KKR will be paying $66.50 a share for the company, which has become one of the biggest health websites on the internet. The price is more than 30% higher than where shares of WebMD started trading at the beginning of the 2017.
As part of the deal, KKR will bring WebMD’s WebMD.com and Medscape.com into their Internet Brands unit that also has DentalPlans.com and AllAboutCounseling.com.
Although Cowen & Co analyst Charles Rhyee thinks the price was higher than expected, he still says the firm is “pleasantly surprised by the premium valuation, given the flat growth expected.” He also said, “We think the valuation may imply that we and consensus may be too conservative.”
According to comScore Inc., WebMD had more than 70 million monthly unique visitors last year.
Disclaimer: We have no position in WebMD Health Corp. (NASDAQ: WBMD) and have not been compensated for this article.