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K.K.R. to Buy WebMD and Take Majority Stake in Nature’s Bounty
LONDON — The private equity giant Kohlberg Kravis Roberts has struck two deals focused on health and wellness, agreeing to buy WebMD and taking a majority stake in the Nature’s Bounty Company.
Kohlberg Kravis Roberts said that Internet Brands, a K.K.R. portfolio company, had agreed to buy WebMD Health Corporation for about $2.8 billion.
The deal came after WebMD said in February that it would explore strategic options, including a potential sale.
Separately, Kohlberg Kravis Roberts said it would acquire a majority stake in Nature’s Bounty from private equity rival the Carlyle Group for an undisclosed amount. Carlyle would retain a significant stake in the company, which makes and distributes health and wellness products, like Nature’s Bounty, MET-Rx and Sundown Naturals.
The deal follows Nature’s Bounty’s decision last month to sell the British retail health food chain to L1Retail, an investment fund controlled by the Russian billionaire Mikhail Fridman.
WebMD provides health information services to consumers, health care professionals, health plans and others through a variety of online portals and publications. The company reported revenue of $705 million in 2016.
Founded in 1996 by Jeffrey T. Arnold, a former medical equipment executive, WebMD was among the most prominent new companies in the dot-com boom. It merged in 1999 with Healtheon Corporation, a company started by the founder of the Netscape Communications Corporation, Jim Clark.
“Since its founding, WebMD has established itself as a trusted resource for health information,” Robert N. Brisco, the Internet Brands chief executive, said in a news release. “We look forward to delivering that resource to even more users, by leveraging our combined resources and presence in online health care to catalyze WebMD’s future growth.”
Internet Brands’ sites include DentalPlans.com, eHealthForum.com, HealthBoards.com, FitDay.com and VeinDirectory.org.
Under the terms of the deal announced on Monday, a subsidiary of Internet Brands will pay $66.50 a share in cash for WebMD, representing a 30 percent premium to the company’s share price on Feb. 15, the day before the company announced it was exploring strategic alternatives.
“We believe that this transaction will provide additional flexibility and resources to deliver increased value to consumers, health care professionals, employers and health plan participants,” Steven L. Zatz, the WebMD chief executive, said in a news release.
Shares of WebMD were up nearly 20 percent in premarket trading on Monday.
The transaction has been approved by WebMD’s board of directors and is expected to close during the fourth quarter.
It is the latest technology deal for Kohlberg Kravis Roberts, which bought Optiv Security, a provider of cybersecurity services, for nearly $2 billion last year. Last week, two founders of the private equity firm, Henry R. Kravis and George R. Roberts, announced a line of succession.
Internet Brands, which is based in El Segundo, Calif., operates a portfolio of websites and client services products focused on automotive, health, legal, and home and travel, including Carsdirect.com, Fodor’s Travel, Lawyers.com and Weddingbee.com.
It was acquired by Kohlberg Kravis Roberts in 2014 for $1.1 billion.
JPMorgan Chase and the law firm Shearman & Sterling advised WebMD, while the law firm Simpson Thacher & Bartlett advised Internet Brands.
Follow Chad Bray on Twitter @Chadbray.
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