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WebMD reviews alternatives
Posted on Friday, 17 February 2017 09:45
WebMD Health has announced it is working with its management and legal and financial advisors on a range of strategic options to maximise shareholder value.
The health information provider, which has a current market capitalisation of USD 1.95 billion, is considering, among other things, a merger with another party to continue executing its business plan.
WebMD has been pinned as an acquisition target for some time with the Financial Times (FT) reporting in January 2016 the group is exploring a sale that could attract interest from the pharmaceutical and media industries.
Martin Wygod, chairman of the business, said while the board reviews alternatives it is also committed to “supporting the company's management and employees in their ongoing efforts to deliver trusted information, innovative products, and outstanding value”.
WebMD cautioned there could be no guarantee the assessment will lead to a transaction and a timetable for the process has not been set.
The business is however working with JPMorgan and Shearman & Sterling on the deal.
According to the report by the FT, which cited people familiar with the matter, a deal would have valued WebMD at over its USD 2.00 billion market capitalisation; however, the company may also wish to explore partnerships instead of an outright sale.
The group is a leading provider of health information services to consumers, physicians and other healthcare professionals, employers and health plans through public and private online portals, mobile platforms and health-focused publications.
Last year, the company had an average of 201.00 million unique users per month and ranked among the top 110 most visited sites in the US, according to web analytics provider Alexa, as cited by the FT.
In addition to announcing plans to explore options, WebMD reported its fiscal earnings for 2016.
This showed an 11.0 per cent increase in revenue year-on-year, and a 43.0 per cent rise in net income, as well as a 19.0 per cent jump in earnings before, interest, taxes, depreciation and amortisation (EBITDA).
The group generated turnover of USD 705.00 million in the year ended 31st December 2016, compared to USD 636.40 million in the previous 12 months.
Net profit totalled USD 91.30 million in FY 2016 (FY 2015: USD 64.00 million), while adjusted EBITDA for the period was USD 230.60 million (FY 2015: USD 193.20 million).
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