WebMD’s Parent Reinvents Itself…Again

By Neil Versel

Feb. 12, 2008 | The parent company of WebMD is reinventing itself yet again.

 On Monday, Elmwood Park, N.J.-based HLTH Corp. announced that it had sold off its remaining 48 percent interest in Emdeon Business Services (Nashville, Tenn.) to private investors General Atlantic and Hellman & Friedman for $575 million in cash. General Atlantic had bought 52 percent of Emdeon, a health care revenue cycle management firm and transaction clearinghouse, in November 2006 for $1.2 billion.

At the time of the partial sale, holding company Emdeon Corp. changed its name to HLTH to distinguish itself from Emdeon Business Services, continuing the company’s long history of evolution. Emdeon and WebMD Health were formed two years ago, when the former WebMD Corp. spun off a portion of its flagship WebMD consumer health portal. The company sold its Emdeon Practice Services unit to Sage Software in late 2006. (See “Sage Becomes Major Player with Purchase of Emdeon Services.”)

Emdeon officials were not immediately available for comment.

Also on Monday, HLTH said that chief executive Kevin Cameron is taking an unspecified medical leave. Chairman Martin J. Wygod, a former WebMD CEO, will take over on an interim basis, according to the company.

HLTH continues to shop its ViPS payer-side software and Porex health care supplies manufacturing subsidiaries, as part of a plan announced in November. “HLTH has received a great deal of interest from potential strategic buyers for both VIPS and Porex since announcing that HLTH was considering selling those businesses,” the company said in a statement. Officials at HLTH, which owns 88 percent of WebMD Health Services, would not offer any more details.

In the same announcement, WebMD lowered its 2008 revenue guidance by about 5 percent, sending its stock down nearly 11 percent in Nasdaq trading, to $28.83 on Monday. The price has stabilized on Tuesday morning, and was above $29 at 10 a.m. EST.

Now a completely private company, Emdeon has added Tracy Bahl to its board of directors. Bahl, a former CEO of the Uniprise benefits management subsidiary of UnitedHealth Group, became a special advisor on healthcare to General Atlantic in November.

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