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K.K.R. Bets Big on Health and Wellness

By NexChange
Asset Management

Private-equity titan Kohlberg Kravis Roberts (K.K.R.) is focusing heavily on health and wellness, demonstrated by two different deals made this week. In addition to a $2.8 billion acquisition of WebMD, K.K.R. has also taken a majority stake in the Nature’s Bounty Company, reports The New York Times.

K.K.R.’s portfolio company Internet Brands agreed to purchase WebMD, with the deal occurring after a February statement from WebMD about exploring strategic options. The terms of the deal stipulate that a subsidiary of Internet Brands will pay $66.50 in cash per share for the health website; a 30 percent bump on the share price the day before the company’s “strategic options” announcement, per NYT.

In a separate deal, K.K.R. has said it plans to purchase a majority stake in Nature’s Bounty from private equity giant the Carlyle Group. The deal’s cash value remains undisclosed.

Carlyle would still retain a minority stake in the health company, which has made its name as a distributor of products such as Nature’s Bounty and Sundown Naturals.

In a similar move last month, Nature’s Bounty also sold Holland and Barrett, a British health food chain, to Russian billionaire Mikhail Fridman’s investment fund L1Retail.

The nature of these two KKR deals shows steady faith in the health and wellness movement.

WebMD is one of the leading providers of health information, boasting online portals that are essential for health care professionals, personal health plans and consumers. Its publications add another layer of information to the company’s outreach, and it reported revenue of $705 million last year, per NYT.

Internet Brands chief executive Robert Brisco heaped praise on the company in a press release earlier today.

“Since its founding, WebMD has established itself as a trusted resource for health information. 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.”

The acquisitions will add to Internet Brand’s growing online health presence, as the portfolio’s sites already include DentalPlans.com, eHealthForum.com, HealthBoards.com, FitDay.com and VeinDirectory.org.

WebMD’s market shares were up nearly 20 percent Monday morning, and the deal is expected to close during the fourth quarter, per WebMD’s board of directors.

Photo: WebMD

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