Please ensure Javascript is enabled for purposes of website accessibility

Here's Why WebMD Health Corp. Is Soaring Today

By Brian Feroldi - Jul 24, 2017 at 12:04PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares jumped after the health information services company announced that it is being taken private.

What happened

The trading week began pleasantly for shareholders in WebMD Health Corp. (WBMD). The health information services provider's stock price was up more than 19% as of 11:52 a.m. EDT Monday after the company announced that it is being taken private.

So what

Internet Brands, a portfolio company of the global investment firm KKR, has agreed to acquire WebMD for $2.8 billion. The deal values WebMD at $66.50 per share, which represents a 20% premium over Friday's closing price.

business men shaking hands and giving money

Image source: Getty Images.

WebMD's board of directors has already approved the transaction, and financing for the deal is already fully committed. The acquisition is expected to close in the fourth quarter.

"We believe that this transaction will provide additional flexibility and resources to deliver increased value to consumers, healthcare professionals, employers, and health plan participants, said WebMD CEO Dr. Steven L. Zatz.

Bob Brisco, CEO of Internet Brands, was also excited about the deal and heaped high praise on the company:

"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."

Now what

Since this deal has already been given the thumbs up by WebMD's board and is fully financed it seems highly likely that it will go through without much trouble. With shares currently trading within $0.50 of the buyout price, it likely makes sense for shareholders to take the victory lap and cash in their chips today. Afterward, they should think about using their proceeds to invest in other promising healthcare companies.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

WebMD Health Corp. Stock Quote
WebMD Health Corp.

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/21/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.