NEW YORK (CNNfn) - Healtheon/WebMD Corp., the fast-growing online health care company, agreed Wednesday to buy consumer-oriented medical Web portal OnHealth Network Co. for about $264 million in stock -- marking its second big acquisition of a competitor this week.|
Atlanta-based Healtheon (HLTH: Research, Estimates), which is racing to corner the burgeoning market for electronic-based medical claims processing and health information over the Internet, has a richly valued stock that has allowed it to make a string of deals. On Monday, the company announced it would buy CareInsite Inc. (CARI: Research, Estimates), its chief competitor in connecting doctors and patients online, and CareInsite's parent, Medical Manager Corp. (MMGR: Research, Estimates), in a deal worth more than $4.7 billion in stock.
In its latest acquisition, Healtheon will offer 0.189435 share of its common stock for each share of OnHealth stock, valuing OnHealth shares at about $13 apiece. That's about a 30 percent premium over OnHealth's closing stock price Tuesday.
Shares of Seattle-based OnHealth jumped 1-13/32 to 11-3/8 on the Nasdaq exchange after the deal was announced.
Healtheon stock slipped 3 to 65-5/8.
The acquisition is expected to close by the middle of the year, pending regulatory approval.
Seeking leadership in market
Industry analysts say that Healtheon is aggressively cutting deals to stake its claim as the No. 1 "e-health" company on the Web, but they caution that the company now must prove that it can integrate all of its acquisitions and carry out its numerous strategic alliances.
Last month, Healtheon agreed to pay $2.5 billion for Envoy, the medical claims-processing business of Quintiles Transnational Corp. (QTRN: Research, Estimates) and announced a nearly $1 billion private placement by Janus Capital Corp.'s mutual funds.
The company also recently has struck alliances with media conglomerate News Corp. (NWS: Research, Estimates). and drugstore chain CVS Corp. (CVS: Research, Estimates). (CNN.com has a content relationship with Healtheon/WebMD and parent company Time Warner Inc. (TWX: Research, Estimates) has a small equity stake in the firm.)