Deals

Tara Lachapelle is a Bloomberg Gadfly columnist covering deals. She previously wrote an M&A column for Bloomberg News.

Good news, WebMD Health Corp.'s prognosis has changed: The website finally found itself a deal. 

KKR & Co., a private equity firm that owns a portfolio of internet properties, agreed Monday to acquire WebMD for $66.50 a share, valuing it at $2.8 billion. The price isn't much for WebMD shareholders to get excited about, but it'll do after what reportedly had been slackening interest from suitors in recent weeks for a company that just a few years ago failed to find viable offers during its first sale go-round.

Exit Time
After a rocky year, WebMD is being taken private by KKR for $66.50 a share
Source: Bloomberg

KKR is paying a mere 16 percent premium to the stock's 20-day trading average and a discount to its record high last May. Still, WebMD investors get to cash out of a bumpy stock ride following disappointing financial forecasts earlier in the year. Meanwhile, the business can focus on boosting growth and continuing to improve margins. 

Treatment Plan
KKR must see room to boost WebMD's profit and improve margins by taking out costs and spurring revenue growth
Source: Bloomberg

WebMD, where users can try to self-diagnose ailments, has been forecasting a 1 percent to 4 percent increase in revenue this year, one of its worst growth rates. Should the transaction close -- which the parties expect to occur in the fourth quarter -- WebMD will become part of KKR's Internet Brands, a subsidiary comprising lesser-known sites such as CarsDirect.com, ApartmentRatings.com and DivorceNet.com. The turnaround doctors at the buyout firm will likely take a scalpel to WebMD's costs to maximize profits and cash flow. 

It may not be the biggest or splashiest buyout of the year, but for WebMD shareholders, it should be a welcome one.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Tara Lachapelle in New York at tlachapelle@bloomberg.net

To contact the editor responsible for this story:
Beth Williams at bewilliams@bloomberg.net