Atlanta’s WebMD Health sold for $2.8B

WebMD was founded in Atlanta by technology entrepreneur Jeff Arnold, and it still has operations here.

Company goes private after 2005 IPO, selling high to buyout firm.

WebMD Health Corp. agreed to be taken private by buyout firm KKR & Co. for about $2.8 billion, five months after hiring bankers to explore a possible sale.

Stockholders of the online health information company will receive $66.50 a share in cash, according to a statement Monday. The price is 20 percent more than Friday’s closing level and 29 percent higher than where the shares traded in mid-February, when WebMD hired JPMorgan Chase to review strategic alternatives.

The sale caps months of speculation about whether WebMD, which went public 12 years ago and is now used by 75 million consumers each month, would find a buyer. In 2012, when the stock was trading near all-time lows, a sale attempt had fallen apart.

WebMD was founded in Atlanta by technology entrepreneur Jeff Arnold, and it still has operations here. The current version of the company, based in New York, was created in 1999 through a merger with Healtheon, which kept the WedMD name after acquiring the business.

For KKR, the acquisition will add to a growing portfolio of health-related firms: Also on Monday, the private equity firm agreed to acquire a majority stake in nutritional supplements maker Nature’s Bounty Co. Its other health-care investments include Air Medical Group Holdings and Arbor Pharmaceuticals.

WebMD’s price has been volatile since the 2005 IPO, and KKR is paying just under the all-time high of $66.98 in May 2016. The stock had slumped in the second part of last year, though, and was trading under $50 at the end of January. In March, activist investor Blue Harbour Group raised its stake in WebMD to 8.99 percent and disclosed talks with the company. The group’s founder and chief executive officer, Cliff Robbins, said at the time that WebMD was underpriced and was likely to appeal to multiple buyers.

“WebMD has a unique position at the convergence of two megatrends, digital commerce and health and wellness, and has two industry-leading businesses in Medscape and WebMD,” David Silverman, a managing director of Blue Harbour Group, said in a statement. “We congratulate WebMD’s board of directors for conducting a thorough strategic review process and reaching this transaction with a great partner for them in KKR.”

WebMD’s shares traded up 20 percent to $65.99 at 10:33 a.m. in New York, its largest intra-day gain since April 2014.