Vestar Capital Partners V and Health Grades, a healthcare ratings organisation, have entered into a definitive agreement for an affiliate of Vestar to acquire all of the outstanding shares of HealthGrades for USD8.20 per share.
The amount represents a premium of approximately 32 per cent over HealthGrades’ 30-day average closing stock price, and a premium of approximately 29 per cent over the closing price of HealthGrades’ common stock on 27 July 2010.
The aggregate purchase price for the equity of HealthGrades is approximately USD294m, which consists of approximately 35.9 million shares, inclusive of all shares of common stock outstanding, securities convertible into common stock and shares of common stock issuable pursuant to a noncompete agreement with an executive officer.
Under the terms of an agreement unanimously approved by the board of directors of HealthGrades, an affiliate of Vestar will commence an all-cash tender offer no later than 10 August 2010.
The offer will be conditioned upon the acquisition by Vestar’s affiliate of at least a majority of HealthGrades’ shares on a fully-diluted basis pursuant to the tender offer and purchases pursuant to tender and support agreements, and other customary closing conditions including regulatory approval.
Executive officers of HealthGrades beneficially owning approximately 21 per cent of HealthGrades’ fully diluted shares have entered into agreements to support the transaction and to tender or otherwise sell shares to Vestar’s affiliate.
Following completion of the tender offer, the affiliate of Vestar will acquire all of the remaining publicly-held shares of HealthGrades at USD8.20 per share through a second-step merger.
Kerry Hicks, chairman and chief executive officer of HealthGrades, says: “We are pleased to announce an agreement of HealthGrades to be acquired by Vestar Capital Partners. We believe the acquisition price of USD8.20 per share, which represents a premium of approximately 32 per cent over our 30-day average closing stock price, represents a strong return for our stockholders and is a great confirmation of all of the efforts of our management team and all of our employees.”