Healtheon/WebMD to acquire the Medical Manager Corp. for 12.68 times revenue

Weekly Corporate Growth Report, Feb 21, 2000

The Deal: The Healtheon/WebMD Corporation has announced that it has signed a definitive agreement to acquire the Medical Manager Corporation, its competitor and leading provider of physician practice management systems. According to the terms of the agreement, each share of the Medical Manager Corp. will be converted to 1.65 share of Healtheon/WebMD. Healtheon/WebMD has made 80 alliances, acquisitions and partnerships in the past 18 months.

In Nasdaq trading, shares of the Medical Manager Corp. rose 33 percent, or $21.75, to close at $86.75, after the news of the acquisition was announced. Shares of CareInsite, which is largely owned by Medical Manager and is also being acquired by Healtheon/WebMD, increased $4.125, to close at $72. Healtheon/WebMD shares were up $1.625, to close at $56.625, also on the Nasdaq.

Discussion: The Medical Manager Corporation, which was formerly known as Synetic, makes surgical plastics and provides medical information services. Its plastics division, Porex Technologies, makes medical devices such as blood filters, pipette tips, and plastic surgery implant parts. Its growing communications unit uses the Internet as a data delivery network for health-care professionals. The company more than doubled its size by acquiring medical information software provider Medical Manager and taking its name in 1999. The company's 68.8 percent-owned CareInsite provides administrative and financial services to doctors.