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Private-equity firms are betting they can revive moribund WebMD.
Four PE firms are bidding for the online medical site after it quietly put itself up for sale, The Post has learned. KKR and Providence Equity Partners are among the suitors vying for the New York-based Internet company, sources said.
WebMD has set Monday as the final bidding deadline, according to two sources close to the situation. One person said WebMD shot down a request to extend the deadline — an indication that a deal is close at hand.
A WebMD spokeswoman did not return calls for comment. KKR and Providence also didn’t respond to requests for comment.
WebMD, whose stock has suffered a steep drop this year, has been seen as a takeover candidate. Savvy investors Carl Icahn and George Soros piled into the company after its shares lost one-third of their value.
Last month, Icahn disclosed in a regulatory filing that he had increased his stake in WebMD to 9.5 percent from 7.9 percent.
The activist investor called on the company to spend $1 billion to buy back its shares as an alternative to a sale to private-equity firms, saying he wasn’t aware of any sales process. He also said WebMD was “undervalued from a long-term perspective.”
The day before, it was reported by TheStreet.com that WebMD was drawing interest from PE firms and was exploring a sale, sending its share price up 10 percent. The stock slipped slightly yesterday to close at $34.61. The company has an “enterprise value” of about $1.65 billion and a market cap of around $2 billion.
Last month, WebMD adopted a poison pill giving it the ability to stop Icahn from buying more than a 12 percent stake. Meanwhile, billionaire Soros has amassed a 5.6 percent stake in WebMD through shares and convertible bonds.
WebMD is still the leading provider of health information online. According to the company’s stats, it gets more than 100 million monthly visitors, or 95 percent of all those adults seeking health info on the Web.
Despite its formidable Web presence, WebMD is suffering from slowing revenue growth.
In July, the company lowered its forecast for full-year revenue to 12 percent, down from 20 percent. In November, it cut its forecast again to 4 percent growth, causing the stock to swoon.
And analysts predict growth may flatline next year. Part of WebMD’s suffering stems from conservative spending by consumer packaged-goods advertisers, the company said.
Private-equity suitors will likely be able to finance a transaction by having WebMD borrow money equal to about six times its EBITDA, which will be about half the purchase price, a source said.