Healtheon Buys Transaction Processor
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Healtheon will exchange 35 million shares of its stock and $400 million cash for the ENVOY unit. Quintiles will issue Healtheon/WebMD a warrant to purchase up to 10 million shares of its common stock at $40 per share, exercisable for four years. As part of the deal, Quintiles (QTRN) will own about 16 percent of Healtheon/WebMD.
With this acquisition, Healtheon/WebMD (HLTH) will process almost 2 billion transactions a year for its health care customers. ENVOY is the largest processor of healthcare EDI transactions in the U.S., including pharmacy, medical, dental and patient statement transactions.
Quintiles and Healtheon/WebMD also inked a strategic alliance to develop and market a suite of products and services for the pharmaceutical industry to improve the speed and efficiency of drug development, physician detailing and delivery of direct-to-consumer health care information. Healtheon/WebMD will eventually create a cyber-detailing channel on WebMD immediately available to Quintiles' contract sales organization with access to the pharmaceutical industry.
- Quintiles will provide Healtheon/WebMD with development funding of up to $100 million over the next 18 months to develop Web- based products and services. Three areas of Internet products are targeted: drug development, physician detailing and direct-to-consumer information delivery
- Healtheon/WebMD will be the exclusive provider of Quintiles' Web- enabled services
- Quintiles will have exclusive rights to de-identified ENVOY transaction data, securing for Quintiles an important element of its acquisition of ENVOY last year.
- Healtheon/WebMD will enter into a data services agreement in which Quintiles will be the exclusive licensee across a wide spectrum of healthcare for de-identified data available from Healtheon/WebMD
- Quintiles Transnational Chairman and Chief Executive Officer Dennis Gillings is expected to be appointed to the Healtheon/WebMD board of directors. The senior management team of ENVOY is expected to remain with the company to run the ENVOY operations from Nashville, where the company is based.
"The acquisition demonstrates that we are executing on our business plan of securing new customers and strategic partnerships to help us drive our transaction volumes, expand our base of physician users and enhance the breadth and functionality of our offerings," said Jeff Arnold, chief executive officer of Healtheon/WebMD.
In related news, Healtheon/WebMD and IDX Systems Corp. Monday forged an agreement in which the healthcare giant would implement IDX's (IDXC) connectivity to have direct access to over 200,000 physicians' desktops.