Private equity firm KKR & Co. has agreed to buy WebMD Health Corp. in a deal valued at about $2.8 billion.
New York-based WebMD has editorial offices in Atlanta. It is a news partner with Georgia Health News.
The all-cash deal would bring together various online health information websites under one roof.
The acquisition announcement Monday comes five months after WebMD said it would explore strategic options amid a slowdown in advertising by pharmaceutical companies.
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, Reuters reported.
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.
Analysts said the deal price was higher than expected, adding that WebMD is a good fit for Internet Brands’ portfolio.
“We are pleasantly surprised by the premium valuation, given the flat growth expected,” said Cowen & Co. analyst Charles Rhyee, according to Reuters. “We think the valuation may imply that we and consensus may be too conservative.”
Jeff Arnold created WebMD in 1996. It merged in 1999 with Healtheon Corporation, a company started by the founder of the Netscape Communications Corporation, Jim Clark.
(Arnold currently is chairman and CEO of Atlanta-based Sharecare, a health and wellness engagement platform he founded with physician and media personality Dr. Mehmet Oz.)
“Since its founding, WebMD has established itself as a trusted resource for health information,” Robert N. Brisco, the Internet Brands chief executive, said in a press release. “We look forward to delivering that resource to even more users, by leveraging our combined resources and presence in online health care to catalyze WebMD’s future growth.”
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.
According to TechCrunch, WebMD ranked 36th in comScore’s top 50 websites in the United States in June, with 71.7 million unique visitors in the month. It was the only site in the medical/health field that made the list.
“We believe that this transaction will provide additional flexibility and resources to deliver increased value to consumers, health care professionals, employers and health plan participants,” Steven L. Zatz , the WebMD chief executive, said in a news release Monday.
The transaction has been approved by WebMD’s board of directors and is expected to close during the fourth quarter.
The company reported revenue of $705 million in 2016.