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WebMD pays $2.5B for firm
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January 24, 2000: 12:06 p.m. ET
Health data Web company to buy medical information transmission firm
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NEW YORK (CNNfn) - Healtheon/WebMD Corp. agreed Monday to pay $2.5 billion in cash and stock for the unit of Quintiles Transnational Corp. that handles the electronic transmission of health-care data.
Shares of both companies rose sharply on news of the deal, which also includes plans for the companies to develop Internet-based business-to-business services for the pharmaceutical industry.
In Monday morning trading, Quintiles stock rose 7-3/8, or 30 percent, to 31-13/16. Healtheon stock jumped 6-9/16, or 11 percent, to 66-1/8.
Healtheon/WebMD (HLTH), a fast-growing health information Web company, will acquire Quintiles' Nashville-based Envoy Corp., a large provider of electronic data services to doctors, pharmacies and insurance companies with about 1.4 billion transactions in 1999.
Healtheon/WebMD, based in Santa Clara, Calif., expects to handle 2 billion transactions a year.
Under the deal, Research Triangle Park, N.C.-based Quintiles (QTRN), which focuses on marketing and strategic analysis for the health care sector, will receive 35 million shares of Healtheon/WebMD, or about a 16 percent stake in the company, as well as $400 million in cash. The total value of the deal, at about $2.5 billion, is based on Friday's closing stock prices.
Also, Healtheon/WebMD will have the option to buy up to 10 million shares of Quintiles common stock at $40 per share over four years.
The deal, subject to regulatory approval, is expected to close by the middle of 2000. 
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