Posted: October 22, 9:15 a.m. CT
Nashville-based Medifax-EDI, a privately held company, is being bought for $280 million in cash by WebMD.
WebMD, formed under the name Healtheon by Netscape founder Jim Clark, has transformed itself from a Web site-based provider of consumer health information into a seller of software allowing doctors to process transactions and patient data. But it's still struggling to be significantly profitable.
The deal, expected to close in November, does not include Medifax�s Pharmacy Services which will be spun off its owner, an affiliate of Crescent Capital Investments Inc.
Medifax with be merged with WebMD�s Envoy, a Nashville-based division that provides outsourced medical billing. Medifax providers medical eligibility transaction services which enable providers to verify insurance coverage for their patients.
The two Nashville operations will be able to process both medical claims and facilitate the transactions between health care providers and payers.
Medifax-EDI's revenue and earnings before interest, taxes, depreciation and amortization (EBITDA) for the six months ended June 30, after splitting out Pharmacy Services companies, were approximately $28.7 million and $9.8 million, respectively.
WebMD was advised in the transaction by Raymond James & Associates Inc. and Medifax-EDI was advised by SunTrust Robinson Humphrey Capital Markets.