business
Claims processing firm goes private
NEWS IN BRIEF — Posted Aug. 15, 2011
Emdeon, a claims processing and revenue cycle management company whose systems are sold to physicians, was removed from public stock trading on Aug. 4 after being bought for $3 billion by a private-equity firm.
Blackstone bought a majority stake in the company for $19 per share, or only $3.50 per share more than the $15.50 trading price Emdeon opened with on its 2009 initial public offering. General Atlantic, another private-equity firm that had bought a majority stake in Emdeon for $1.8 billion in 2006, sold its shares in the transaction.
Emdeon has connections to Healthscape, which was founded in 1995 by Netscape co-founder Jim Clark as his next big Internet venture after that company had a hugely successful Wall Street reception after changing its name to Healtheon.
Healtheon, after merging with WebMD in 1999, paid $2.5 billion in 2000 to acquire Envoy. In 2005 -- after the Internet stock bubble had burst -- Healtheon/WebMD changed its name to Emdeon, and put the WebMD health information business out as a public stock offering.
Analysts said Blackstone's interest in Emdeon was likely because it believed that its stock was undervalued at a time when health system reform is creating more demand for the automated services that Emdeon provides.
Note: This item originally appeared at http://www.ama-assn.org/amednews/2011/08/15/bibf0815.htm.
