The HLTH Corporation has sold its minority interest in Emdeon Business Services to the company that owns the majority stake in the business.
HLTH also said efforts to acquire the portion of the WebMD subsidiary that it does not own have stalled, and it plans to continue negotiations. The company is reported to own 84 percent of WebMD shares.
Earlier this week, HLTH reported the sale of its 48-percent stake in Emdeon Business Services for $575 million in cash to General Atlantic LLC and Hellman & Friedman LCC, which are private investment firms.
In November 2006, General Atlantic purchased the 52-percent stake in the business for $1.2 billion. At that time, the parent company changed its name to HLTH Corp. from Emdeon to distinquish its name from the acquired business line.
Emdeon Business Services provides revenue cycle and clinical communication solutions intended to simplify the business and improve the delivery of healthcare. Its products are designed to provide providers, payers and patients with connectivity and information.
The sale is the latest step in the saga of the company that began as Healtheon back in the late 1990s as the vision of James Clark, founder of Netscape. Healtheon was intended to streamline the healthcare insurance process, and in 1999 it acquired WebMD, the most popular source for healthcare information at that time. In 2001, the company acquired Medical Manager, a practice management solution with thousands of users; that business segment was divested in 2006 to Sage Software.
"HLTH is very pleased to complete the sale of its minority interest in Emdeon," said Martin J. Wygod, chairman and acting CEO of HLTH and former head of Medical Manager before its 2001 acquisition by Healtheon/WebMD. "We have worked closely with General Atlantic over the past year to further solidify Emdeon Business Services' market leadership. HLTH and WebMD look forward to continuing to work with Emdeon in our ongoing product development and marketing relationships."
Separately, HLTH announced that Wygod was assuming the role as acting CEO because of the medical leave of Kevin Cameron, who had been in that role previously.
HLTH apparently is still looking for buyers for two other business segments, one that develops payer software and one that develops porous plastic products. The intended sales come as part of HLTH's previously announced plan to focus on its WebMD line and boost its role as a health information provider.
In a related announcement, WebMD advised that it was anticipating lower revenues than it had previously suggested for 2008. The company lowered its previous revenue guidance for this year by 5 percent, citing lower revenues from display advertising agreements with Yahoo, recent legal developments affecting marketing plans of some pharmaceutical advertisers and a more cautious business environment.
WebMD said it expects 2008 revenue of $395 million to $415 million. It lowered its projected net income for 2008 to a range from $36.5 million to $46 million; in November, it had estimated net income of $44 million to $53 million.