New York-based private equity firm Vestar Capital Partners will acquire consumer health care content vendor Health Grades Inc. for $294 million.

At least a dozen law firms that specialize in shareholder lawsuits have launched investigations of whether Health Grades "adequately shopped itself" before agreeing to the Vestar deal. The purchase price, however, is nearly five times Health Grades' expected 2010 revenue based on its financial performance during the first half of the year when it had $30.5 million in revenue and $5.1 million in net income. Further, the $8.20 per share price that Vestar is offering is 32% higher than the closing stock price during the past 30 days.

Golden, Colo.-based Health Grades operates a Web site offering ratings and profiles of 5,000 hospitals, 750,000 physicians and 16,000 nursing homes, as well as consumer-oriented medical reference content. The company is publicly traded and will go private when the acquisition closes.

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--Joseph Goedert


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