Emdeon, Blackstone Capital Ink $3b Definitive Merger

August 05, 2011 / Albert Hamon, Mergers and Acquisitions Reporter

Emdeon Inc. (NYSE: EM), a provider of healthcare revenue and payment cycle management and clinical information exchange solutions, has entered into a definitive merger agreement with Blackstone Capital Partners VI L.P. in a transaction valued at approximately $3 billion that will result in Emdeon becoming a private company.

Emdeon, Blackstone Capital Ink $3b Definitive Merger

Under the agreement, Blackstone will acquire a controlling interest in Emdeon. Hellman & Friedman will maintain a significant minority equity interest in Emdeon.

The merger will allow holders of Emdeon common stock to receive $19.00 per share in cash. Emdeon’s Board of Directors has unanimously approved the merger agreement. It also recommended that Emdeon’s stockholders adopt the merger agreement.

General Atlantic and Hellman & Friedman agreed to vote shares that they owned, representing in the aggregate approximately 70 percent of the company’s outstanding shares, in favor of the transaction.

“This transaction provides for a great return for our investors,” said George Lazenby, chief executive officer for Emdeon.

“We are excited about the opportunity to move forward with two excellent investors in Blackstone and Hellman & Friedman. They each have an in-depth understanding of our business and industry, and will be tremendous partners as we continue to pursue our strategy of making healthcare efficient.

“We are looking forward to building upon our leadership position in healthcare information technology and services, made possible by the continued support of our customers and the dedication and commitment of our employees.”

Lazenby added: “We also wish to acknowledge the tremendous contributions of global growth investor General Atlantic in our development and thank them for the leadership and support they have provided since becoming our majority owner in 2006.”

Neil Simpkins, senior managing director of Blackstone, said: “Blackstone looks forward to supporting Emdeon and its experienced management team, in continuing to provide innovative products and services to the healthcare industry.”

“We are excited about the proposed transaction and the value it brings to Emdeon stockholders,” added Allen Thorpe, managing director for Hellman & Friedman.

The transaction is subject to customary closing conditions, including approval by Emdeon’s stockholders and clearance under the Hart-Scott-Rodino Act, and is currently expected to be completed in the second half of 2011.

After completion of the transaction, Emdeon will become a privately held company and its Class A common stock will no longer be traded on the New York Stock Exchange.

Morgan Stanley acted as lead financial advisor and UBS Investment Bank acted as co-financial advisor to Emdeon’s Board of Directors.

Paul Weiss, Rifkind, Wharton & Garrison LLP acted as legal advisor to Emdeon.

King & Spalding LLP acted as legal advisor to Emdeon’s outside directors. Blackstone Advisory Partners LP, Banc of America Merrill Lynch, Barclays Capital and Citigroup acted as financial advisors and Ropes & Gray LLP acted as legal advisors to Blackstone.

Blackstone has secured committed financing from Banc of America Merrill Lynch, Barclays Capital and Citigroup. These funds, on top of the equity financing from Blackstone, will finance the cash consideration to be paid to Emdeon’s stockholders.

Emdeon noted that, with the proposed transaction, it will not host a conference call to discuss financial results for the second quarter of 2011. The company expects to issue its earnings release and file its Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 on or about August 8, 2011.

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