Blackstone to take Emdeon private for $3 billion

Thu Aug 4, 2011 11:11am EDT

(Reuters) - Healthcare IT provider Emdeon Inc EM.N said it agreed to be taken private for $3 billion by Blackstone (BX.N), the latest in a slew of private equity deals in the healthcare space.

The private equity firm's offer of $19.00 per Emdeon share represents a 17 percent premium to Emdeon's Wednesday close of $16.25 on the New York Stock Exchange.

"I think $19 per share is fair," said Caris & Co analyst Leo Carpio.

Shares of Nashville, Tennessee-based Emdeon, rose 14 percent on Thursday morning to $18.57, just shy of Blackstone's offer.

Blackstone's offer for Emdeon follows the recent $5 billion buy-out of medical devices firm Kinetic Concepts Inc KCI.N by Apax Partners and two Canadian pension funds, and TPG Capital's TPG.UL $2 billion deal to buy diagnostics firm Immucor Inc BLUD.O.

Carpio also added that private equity's interest in healthcare IT providers stems from the fact that while the fiscal deficit would result in Medicare and Medicaid reimbursement cuts, hospitals and healthcare providers will seek healthcare IT providers to cut costs.

"Emdeon currently holds 30 percent market share of Medicare claims processing in the United States. That has made it the perfect acquisition target," the analyst said.

Blackstone's offer, which was approved by Emdeon's board, is backed by committed financing from Banc of America Merrill Lynch, Barclays Capital and Citigroup.

Two of Emdeon's stockholders -- General Atlantic and Hellman & Friedman -- have agreed to vote in favor of the deal.

Together, they own about 70 percent of Emdeon's outstanding shares.

(Reporting by Vidya L Nathan in Bangalore, Additional reporting by Megan Davies and Bill Berkrot in New York; Editing by Sriraj Kalluvila)

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