HEALTHEON/WEBMD: Company Completes Acquisitions, Gets New Name
With a "catchier" new name and the recent acquisitions of software provider Medical Manager Corp., its CareInsite Inc. subsidiary and health content provider OnHealthNetwork Co., Healtheon/WebMD Corp. is hoping to attract more physicians and consumers to its Web site and services, the Wall Street Journal reports. The initial deal to acquire Medical Manager was struck seven months ago but was held up by the "brutal drop" in Internet company stock values last spring. To complete the $2.13 billion acquisition, Healtheon/WebMD, now simply called WebMD Corp., upped the number of shares given to Medical Manager shareholders. The company exchanged 2.5 shares for each of Medical Manager's 40.7 million outstanding shares and 1.3 shares for each of the 25 million CareInsite shares not owned by Medical Manager. OnHealthNetwork was acquired for stock valued at $75.2 million. Healtheon/WebMD CEO Jeffery Arnold and Martin Wygod, chair of Medical Manager and CareInsite, will serve as co-CEOs of WebMD. The recent acquisitions bring the total number of companies acquired by WebMD since November to eight. The Wall Street Journal reports that WebMD's multiple acquisitions will be a challenge for the company, which "continues to bleed red ink." However, WebMD has created a special committee to evaluate "which parts are key and which are expandable." In addition to the acquisitions, WebMD is preparing to launch a new product later this year that will combine WebMD Practice, the company's professional Web portal, with software systems such as Medical Manager. The combined product would allow doctors to access the system from their offices, homes or a hospital. WebMD hopes the new service will increase transactions, which would boost the company's fee revenue (Carrns, 9/13).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.