The HLTH Corp. continued to follow through on plans to sell subsidiaries by announcing the sale of its ViPS unit to General Dynamics Information Technology, Inc. for $225 million in cash.
The sale is one more step that HLTH was expected to make along the way to merging with WebMD.
The transaction has been approved by the boards of both companies and is awaiting standard regulatory approval. The deal is expected to be completed this year.
ViPS provides healthcare data management solutions and related services to governmental entities, Blue Cross Blue Shield plans and commercial healthcare payers. ViPS solutions and services are designed to help clients improve patient outcomes, increase customer satisfaction and reduce costs.
The purchaser, a wholly owned subsidiary of General Dynamics Corp., is headquartered in Fairfax, Va. Its Web site does not show a separate business line for healthcare.
General Dynamics Information Technology employs 15,000 and specializes in network system integration, information technology and telecommunications, simulation and training, professional and technical services, systems engineering and public safety.
"ViPS is an outstanding company that provides complementary capabilities and an expanded customer base in a high-growth market segment for General Dynamics Information Technology," said Dan Johnson, president of the unit. "ViPS has significant skills in application integration and information assurance, as well as an exceptional reputation within the Department of Health and Human Services, and specifically the Centers for Medicare and Medicaid Services, as a provider of secure applications that create lasting value for its customers."
The sale of the ViPS unit is one step HLTH had to complete as it seeks to merge with WebMD. In that deal, announced in late February, HLTH will be merged into WebMD, with each outstanding share of HLTH stock to be converted into 0.1979 shares of WebMD common stock and $6.89 in cash, subject to certain adjustments.
The merger is contingent on completion of a review by the Securities and Exchange Commission, the completed sale of either ViPS or HLTH's Porex subsidiary, and the approval of both companies' shareholders. HLTH currently owns 84 percent of the outstanding common stock of WebMD.