HealthGrades.com Owner Being Taken Private In $294 Million Deal

Health Grades

Health Grades, the publicly-traded owner of popular doctor ratings site HealthGrades.com, is being taken private by PE firm Vestar Capital Partners in a $294 million deal. Vestar, which includes former WebMD (NSDQ: WBMD) CEO Roger Holstein among its partners, is paying $8.20 per share for Health Grades, a 29 percent premium over Health Grade’s closing price yesterday.

Health Grades generates the majority of its revenue by selling marketing products and advisory services to hospitals. But it also makes money from advertising and by selling reports to consumers on its websites, which in addition to its flagship, include WrongDiagnosis.com and CureResearch.com, which it purchased for $6.2 million in October 2008. Together, the sites average about 19 million unique visitors a month putting Health Grades in fifth place in the online health category, according to comScore.

Health Grades says its board has approved the deal and that executives who own about 21 percent of its shares are supporting it. Some more details in the release.

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