WebMD Health Corp. (NASDAQ:WBMD) stock was on the rise today following news of a deal with portfolio company KKR.
The deal will have KKR acquiring WebMD Health Corp. for $66.50 per share. This places a value that is a 30% premium over WBMD stock’s closing price on Feb. 15, 2017, which was the last day before it announced that it was exploring strategic alternatives. It is also 20% above WBMD stock’s closing price for July 21, 2017.
The total value of the deal between KKR and WebMD Health Corp. is $2.8 billion. KKR is using cash to buyout WBMD stock and it has secured the majority money from its private equity funds. It also notes that the financing for the deal is fully committed. The company will use a subsidiary of Internet Brands to place a tender offer for all WMBD shares within the next 10 business days.
WebMD Health Corp.’s Baord of Directors have already given their approval to the merger with KKR. WBMD Chairman Martin Wygod said that the company is “confident that this transaction maximizes value for our stockholders.”
WebMD Health Corp. is getting legal advice from Shearman & Sterling LLP and financial advice from J.P. Morgan Securities LLC. Internet Brands is getting its legal advice from Simpson Thacher & Bartlett LLP.
WebMD Health Corp. says that it expects the deal with KKR to close during the fourth quarter of 2017. However, it will first have to complete customary closing conditions before it can do so.
WBMD stock was up 19% as of Monday morning and is up 33% year-to-date.
As of this writing, William White did not hold a position in any of the aforementioned securities.
