Leading medical information website to be sold to private equity firm
WebMD, the leading health care information source on the Internet, announced Monday it would be sold to private equity firm KKR for $2.8 billion.
Once the deal is approved by regulators, the publically traded company will go private.
WebMD was bought by the KKR-controlled company Internet Brands, that owns a portfolio of content websites ranging from automobiles to weddings to travel.
WebMD is known for providing possibly diagnoses for symptoms entered by visitors to its website.
Founded in 1996, it now receives more unique visitors every month than any other health care website owned by a private company or government.
The site received 71.7 million unique visitors in June, according to web traffic analyst firm comScore. The company also owns Medscape.com and MedicineNet.com, and a software division that provides programs to the health care industry.
But WebMD has struggled to create revenue via advertisements for different drugs. The company has been looking for a buyer since February.
"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 chief executive Steven Zatz said in a statement. "I am confident this will be an exciting new chapter for WebMD.”
It has also faced fierce competition from rival health care content sites, including Google that had a new feature that insert health care information directly onto its main web search website.
"WebMD and Medscape 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 stock shot up nearly 20 percent to close Monday at $66.10. Terms of the KKR sale dictate shareholders to be paid $66.50 per share.