Health Sites Merger to Challenge WebMD
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Privately held online health sites Revolution Health Network and Waterfront Media agreed to merge in a deal that could challenge WebMD Health Corp's dominance in the health care space.
The companies did not disclose the financial terms in a joint statement, but the New York Times said on Friday the deal was worth $300 million.
The combined company is projected to have more than 20 million unique users, the companies said, citing a comScore Media Metrix report.
The New York Times said the combined entity would have enough traffic in the United States to compete with WebMD (NASDAQ: WBMD), now the market leader in the online health category.
"We think we have the wind at our back and can pass them," Steve Case, Revolution's founder, told the paper referring to WebMD. Case is also the co-founder of AOL, a Time Warner (NYSE: TWX) unit.
The combined company will keep the name Waterfront Media and remain headquartered in Brooklyn, New York. Waterfront Media Chief Executive and co-founder Benjamin Wolin will remain the CEO of the new company.
Credit Suisse acted as the financial adviser to Waterfront Media while Morgan Stanley (NYSE: MS) advised Revolution Health Network on the deal.
Waterfront Media operates the Everyday Health Network, including its flagship site EverydayHealth.com. Revolution Health, under the Revolution umbrella, runs the RevolutionHealth.com site.
Revolution Health Network, Waterfront Media and WebMD could not be immediately reached by Reuters for comments.