Vestar Capital Partners V, L.P., a private equity firm, will purchase healthcare ratings company HealthGrades, Inc. in a deal valued at $294 million, the two companies jointly announced Wednesday.
The purchase price—$8.20 per share for approximately 35.9 million shares—represents a 32% premium over HealthGrades' 30-day average closing stock price, and a premium of approximately 29% over the closing price of HealthGrades' common stock on Tuesday, the last trading day prior to today's announcement.
The agreement, unanimously approved by the board of directors at Golden, CO-based HealthGrades, calls for Vestar to make an all-cash tender offer no later than Aug. 10.
"We are pleased to announce an agreement of HealthGrades to be acquired by Vestar Capital Partners,? HealthGrades CEO/Chairman Kerry Hicks said. ?We believe the acquisition price of $8.20 per share, which represents a premium of approximately 32% over our 30-day average closing stock price, represents a strong return for our stockholders and is a great confirmation of all of the efforts of our management team and all of our employees."
HealthGrades executives, who own approximately 21% of HealthGrades' shares, have agreed to support the transaction and sell their shares to Vestar. After the tender offer, Vestar will acquire all of the remaining publicly-held shares of HealthGrades at $8.20 per share through a second-step merger.
The deal includes all shares of common stock outstanding, securities convertible into common stock, and shares of common stock issuable pursuant to a non-compete agreement with an executive officer.
John Commins is a senior editor at HealthLeaders.