WebMD Sold To Private Equity For $2.8B

Online health media juggernaut WebMD has been acquired by Internet Brands, a media holding company owned by private-equity firm KKR & Co., for $2.8 billion, the companies announced Monday. Internet Brands is paying $66.50 per share, for a premium of around 20% over the most recent closing price of $55.26.

WebMD will be incorporated into the advertising network operated by Internet Brands, which includes hundreds of Web sites in business-to-business and consumer media Web sites, spanning the automotive, home, travel, health, and legal categories.

WebMD may also be a useful adjunct for other parts of Internet Brands’ business, including healthcare directories, marketing, workflow management and Web services for the health sector.

Founded in 1996 by Silicon Valley entrepreneur James Clark as an online health compendium with a search component, WebMD became an early, high-profile Web publishing success story.

It was one of the first online publishers to go public, with an IPO asking for $24.65 per share in 2005. The stock price fluctuated over time, reaching as low as $13.37 in November 2012, but had been trending steadily upwards over the last three years, reflecting steady revenue growth and solid profitability.



In 2016, WebMD posted total revenues of $705 million, up 11% from $636 million the year before, due principally to its advertising and sponsorship business, which increased 12% from $499 million to $561 million. Its WebMD Health Network, which also includes Mescape, attracted a total of 180 million unique visitors per month in the last quarter of the year.

In addition, the company publishers a print magazine, WebMDMagazine, that is distributed to doctor’s offices.

Despite its high profile, WebMD also faces competition from a growing number of rivals, like Everyday Health and MedlinePlus.

The acquisition closes a long, wide-ranging auction that saw multiple bids for the site. According to WebMD chairman Martin Wygod, around 100 different suitors came forward with expressions of interest over the course of the sale process.

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