Emdeon Inc (NYSE: EM), a leading provider of healthcare revenue and payment cycle management and clinical information exchange solutions, has entered into a definitive merger agreement with Blackstone Capital Partners VI LP under which this Blackstone fund will acquire a controlling interest in Emdeon in a transaction valued at approximately USD3 billion. The deal will result in Emdeon becoming a private company, while Hellman & Friedman will maintain a significant minority equity interest in the company.
Under the terms of the merger agreement, holders of Emdeon common stock will receive USD19.00 per share in cash. Emdeon’s Board of Directors has unanimously approved the merger agreement and is recommending that Emdeon’s stockholders adopt the merger agreement. General Atlantic and Hellman & Friedman have agreed to vote shares owned by them representing, in the aggregate, approximately 70% of the Company’s outstanding shares, in favor of the transaction.
"This transaction provides for a great return for our investors," says George Lazenby, chief executive officer for Emdeon. "We are excited about the opportunity to move forward with two excellent investors in Blackstone and Hellman & Friedman. They each have an in-depth understanding of our business and industry, and will be tremendous partners as we continue to pursue our strategy of making healthcare efficient. We are looking forward to building upon our leadership position in healthcare information technology and services, made possible by the continued support of our customers and the dedication and commitment of our employees."
Lazenby ads: "We also wish to acknowledge the tremendous contributions of global growth investor General Atlantic in our development and thank them for the leadership and support they have provided since becoming our majority owner in 2006."
"We are thrilled to be investing in such a high quality company," says Neil P Simpkins, senior managing director of Blackstone. "Blackstone forward to supporting Emdeon and its experienced management team, in continuing to provide innovative products and services to the healthcare industry."
"We are excited about the proposed transaction and the value it brings to Emdeon stockholders," says Allen Thorpe, managing director for Hellman & Friedman. "We believe that Emdeon has a great healthcare IT franchise and we look forward to the next chapter of our working relationship."
The transaction is subject to customary closing conditions, including approval by Emdeon’s stockholders and clearance under the Hart-Scott-Rodino Act, and is currently expected to be completed in the second half of 2011. Following completion of the transaction, Emdeon will become a privately held company and its Class A common stock will no longer be traded on the New York Stock Exchange.
Morgan Stanley acted as lead financial advisor and UBS Investment Bank acted as co-financial advisor to Emdeon’s Board of Directors. Paul Weiss, Rifkind, Wharton & Garrison LLP acted as legal advisor to Emdeon. King & Spalding LLP acted as legal advisor to Emdeon’s outside directors. Blackstone Advisory Partners LP, Banc of America Merrill Lynch, Barclays Capital and Citigroup acted as financial advisors and Ropes & Gray LLP acted as legal advisors to Blackstone.
