Looking to expand on its footprint in the healthcare information field, WebMD Health Corp. has entered into an agreement to buy Subimo, LLC, a provider of healthcare information support applications to large employers, health plans and financial institutions.
WebMD will pay $34 million in cash on the closing date, which is expected to occur before the end of the year, and $26 million in stock or cash two years after that closing date, subject to conditions. In addition, senior management members of Subimo will enter into long-term employment contracts with WebMD.
WebMD and its parent company, the Emdeon Corporation, recently released third quarter financial results which indicate WebMD’s revenues have jumped almost 50 percent over those of the same quarter last year. WebMD’s segment revenue was $66.6 million for the three months ending Sept. 30, compared to $45.1 million for the same segment last year.
A press release issued by both WebMD and the Chicago-based Subimo says the acquisition will allow WebMD to delve deeper into the emerging consumer-directed health plan (CDHP) market, which comprises six percent of all health plans in the country and is expected to rise to 25 percent by 2010.
“As healthcare consumerism continues to grow, WebMD is committed to partnering with health plans, employers and financial institutions in order to enable customers to make more informed choices and plan for future healthcare costs,” said Wayne Gattinella, WebMD’s CEO.
During a recent conference call with analysts, Gattinella said WebMD might not be done expanding.
“Whenever we can find businesses or applications that fit well with our distribution or with other assets we will take advantage of them,” he said. “At this point, we don’t know if we’re going to be doing any other (business) between now and the end of the year, but there is a possibility that we may do one.”
Subimo offers a suite of decision and wellness tools that help consumers select insurance coverage, fund tax-preferred accounts, determine costs for medical services, select hospitals, drugs and physicians and manage personal health records. According to the company, nearly 75 million Americans have access to Subimo tools through their insurance company, employer of financial institution. It is estimated that 75 percent of all Blue Cross Blue Shield plans in the U.S. use Subimo tools.