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These excerpts taken from the WBMD 10-K filed Feb 29, 2008. Recent
Developments
HLTH Merger. On February 20, 2008,
HLTH and WebMD entered into a Merger Agreement, pursuant to
which HLTH will merge into WebMD, with WebMD continuing as the
surviving company. In the HLTH Merger, each outstanding share of
HLTH common stock will be converted into 0.1979 shares of
WebMD
Table of Contents
common stock and $6.89 in cash, which cash amount is subject to
downward adjustment as described below (we refer to this as the
Merger Consideration). The shares of WebMD Class A Common
Stock currently outstanding will remain outstanding and will be
unchanged in the HLTH Merger. If the HLTH Merger is consummated,
it will eliminate both the controlling class of WebMD stock held
by HLTH and WebMD’s existing dual-class stock structure.
The terms of the Merger Agreement were negotiated between HLTH
and a Special Committee of the Board of Directors of WebMD. The
Merger Agreement was approved by the Board of WebMD based on the
recommendations of the Special Committee and by the Board of
HLTH.
The cash portion of the Merger Consideration will be funded from
cash and investments at WebMD and HLTH, and proceeds from
HLTH’s anticipated sales of its ViPS and Porex businesses.
ViPS provides healthcare data management, analytics,
decision-support and process automation solutions and related
information technology services to governmental, Blue Cross Blue
Shield and commercial healthcare payers. Porex is a developer,
manufacturer and distributor of proprietary porous plastic
products and components used in healthcare, industrial and
consumer applications. As previously announced, HLTH has
received significant interest from potential strategic buyers
for both ViPS and Porex and will be seeking formal offers for
these businesses from potential buyers. The cash portion of the
Merger Consideration is subject to downward adjustment prior to
closing, based on the amount of proceeds received from the
disposition of HLTH’s investment in certain auction rate
securities (ARS), which, under the terms of the Merger
Agreement, must be liquidated by HLTH prior to the closing of
the HLTH Merger. We cannot predict, at this time, the amount of
such downward adjustment. HLTH had approximately
$195 million of investments in certain ARS, excluding any
ARS investments held by WebMD as of the date of this Annual
Report. As described more fully below, the types of ARS
investments that HLTH owns are backed by student loans, 97% of
which are guaranteed under the Federal Family Education Loan
Program (FFELP).
If either ViPS or Porex has not been sold at the time the HLTH
Merger is ready to be consummated, WebMD may issue up to
$250 million in redeemable notes to the HLTH shareholders
in lieu of a portion of the cash consideration otherwise payable
in the Merger. The notes would bear interest at a rate of 11%
per annum, payable in kind annually in arrears. The notes would
be subject to mandatory redemption by WebMD from the proceeds of
the divestiture of the remaining ViPS or Porex business. The
redemption price would be equal to the principal amount of the
notes to be redeemed plus accrued but unpaid interest through
the date of the redemption.
Completion of the HLTH Merger is subject to: HLTH and WebMD
receiving required shareholder approvals; a requirement that the
surviving company have an amount of cash, as of the closing, at
least equal to an agreed upon threshold, calculated in
accordance with a formula contained in the Merger Agreement;
completion of the sale by HLTH of either ViPS or Porex and the
sale of HLTH’s ARS investments; and other customary closing
conditions. HLTH, which owns shares of WebMD constituting
approximately 96% of the total number of votes represented by
outstanding shares, has agreed to vote its shares of WebMD in
favor of the HLTH Merger. The transaction is expected to close
in the second or third quarter of 2008.
Following the HLTH Merger, WebMD, as the surviving corporation,
will assume the obligations of HLTH under HLTH’s
31/8% Convertible
Notes due September 1, 2025 and HLTH’s
1.75% Convertible Subordinated Notes due June 15,
2023. As of the date of this Annual Report, there is outstanding
$300 million in principal amount of HLTH’s
31/8%
Convertible Notes and $350 million in principal amount of
HLTH’s 1.75% Convertible Subordinated Notes. In the event a
holder of these Notes converts these Notes into shares of HLTH
common stock pursuant to the terms of the applicable indenture
prior to the effective time of the HLTH Merger, those shares
would be treated in the HLTH Merger like all other shares of
HLTH common stock. In the event a holder of the Notes converts
those Notes pursuant to the applicable indenture following the
effective time of the HLTH Merger, those Notes would be
converted into the right to receive the Merger Consideration
payable in respect of the HLTH shares into which such Notes
would have been convertible.
Additional Information About the Proposed HLTH Merger and
Where to Find It: In connection with the proposed
HLTH Merger, HLTH and WebMD expect to file, with the SEC, a
proxy statement/prospectus as part of a registration statement
regarding the proposed transaction. Investors and security
holders are urged to read the proxy statement/prospectus because
it will contain important information about HLTH and WebMD
Table of Contents
and the proposed transaction. Investors and security holders
may obtain a free copy of the definitive proxy
statement/prospectus and other documents when filed by HLTH and
WebMD with the SEC at www.sec.gov or www.hlth.com or
www.wbmd.com. Investors and security holders are urged to read
the proxy statement/prospectus and other relevant material when
they become available before making any voting or investment
decisions with respect to the HLTH Merger.
Investment in Auction Rate
Securities. As of February 21, 2008,
WebMD had a total of approximately $327 million in
consolidated cash, cash equivalents and marketable securities,
which includes approximately $169 million of investments in
ARS. The types of ARS investments that WebMD owns are backed by
student loans, 97% of which are guaranteed under the Federal
Family Education Loan Program (FFELP), and all had credit
ratings of AAA or Aaa when purchased. WebMD does not own any
other type of ARS investments.
The interest rates on these ARS are reset every 28 days by
an auction process. Historically, these types of ARS investments
have been highly liquid. In mid-February 2008, auctions for ARS
investments backed by student loans failed, including auctions
for ARS investments held by WebMD. The result of a failed
auction is that these ARS continue to pay interest in accordance
with their terms until the next successful auction; however,
liquidity will be limited until there is a successful auction or
until such time as other markets for these ARS investments
develop. As of the date of this Annual Report, WebMD believes
that the underlying credit quality of the assets backing its ARS
investments has not been impacted by the reduced liquidity of
these ARS investments. As a result of these recent events, WebMD
is in the process of evaluating the extent of any impairment in
its ARS investments resulting from the current lack of
liquidity; however, WebMD is not yet able to quantify the amount
of any such impairment. WebMD believes that any lack of
liquidity relating to its ARS investments will not have an
impact on its ability to fund its current operations.
Table of Contents
Recent Developments HLTH Merger. On February 20, 2008, HLTH and WebMD entered into a Merger Agreement, pursuant to which HLTH will merge into WebMD, with WebMD continuing as the surviving company. In the HLTH Merger, each outstanding share of HLTH common stock will be converted into 0.1979 shares of WebMD
Table of Contentscommon stock and $6.89 in cash, which cash amount is subject to downward adjustment as described below (we refer to this as the Merger Consideration). The shares of WebMD Class A Common Stock currently outstanding will remain outstanding and will be unchanged in the HLTH Merger. If the HLTH Merger is consummated, it will eliminate both the controlling class of WebMD stock held by HLTH and WebMD’s existing dual-class stock structure. The terms of the Merger Agreement were negotiated between HLTH and a Special Committee of the Board of Directors of WebMD. The Merger Agreement was approved by the Board of WebMD based on the recommendations of the Special Committee and by the Board of HLTH. The cash portion of the Merger Consideration will be funded from cash and investments at WebMD and HLTH, and proceeds from HLTH’s anticipated sales of its ViPS and Porex businesses. ViPS provides healthcare data management, analytics, decision-support and process automation solutions and related information technology services to governmental, Blue Cross Blue Shield and commercial healthcare payers. Porex is a developer, manufacturer and distributor of proprietary porous plastic products and components used in healthcare, industrial and consumer applications. As previously announced, HLTH has received significant interest from potential strategic buyers for both ViPS and Porex and will be seeking formal offers for these businesses from potential buyers. The cash portion of the Merger Consideration is subject to downward adjustment prior to closing, based on the amount of proceeds received from the disposition of HLTH’s investment in certain auction rate securities (ARS), which, under the terms of the Merger Agreement, must be liquidated by HLTH prior to the closing of the HLTH Merger. We cannot predict, at this time, the amount of such downward adjustment. HLTH had approximately $195 million of investments in certain ARS, excluding any ARS investments held by WebMD as of the date of this Annual Report. As described more fully below, the types of ARS investments that HLTH owns are backed by student loans, 97% of which are guaranteed under the Federal Family Education Loan Program (FFELP). If either ViPS or Porex has not been sold at the time the HLTH Merger is ready to be consummated, WebMD may issue up to $250 million in redeemable notes to the HLTH shareholders in lieu of a portion of the cash consideration otherwise payable in the Merger. The notes would bear interest at a rate of 11% per annum, payable in kind annually in arrears. The notes would be subject to mandatory redemption by WebMD from the proceeds of the divestiture of the remaining ViPS or Porex business. The redemption price would be equal to the principal amount of the notes to be redeemed plus accrued but unpaid interest through the date of the redemption. Completion of the HLTH Merger is subject to: HLTH and WebMD receiving required shareholder approvals; a requirement that the surviving company have an amount of cash, as of the closing, at least equal to an agreed upon threshold, calculated in accordance with a formula contained in the Merger Agreement; completion of the sale by HLTH of either ViPS or Porex and the sale of HLTH’s ARS investments; and other customary closing conditions. HLTH, which owns shares of WebMD constituting approximately 96% of the total number of votes represented by outstanding shares, has agreed to vote its shares of WebMD in favor of the HLTH Merger. The transaction is expected to close in the second or third quarter of 2008. Following the HLTH Merger, WebMD, as the surviving corporation, will assume the obligations of HLTH under HLTH’s 31/8% Convertible Notes due September 1, 2025 and HLTH’s 1.75% Convertible Subordinated Notes due June 15, 2023. As of the date of this Annual Report, there is outstanding $300 million in principal amount of HLTH’s 31/8% Convertible Notes and $350 million in principal amount of HLTH’s 1.75% Convertible Subordinated Notes. In the event a holder of these Notes converts these Notes into shares of HLTH common stock pursuant to the terms of the applicable indenture prior to the effective time of the HLTH Merger, those shares would be treated in the HLTH Merger like all other shares of HLTH common stock. In the event a holder of the Notes converts those Notes pursuant to the applicable indenture following the effective time of the HLTH Merger, those Notes would be converted into the right to receive the Merger Consideration payable in respect of the HLTH shares into which such Notes would have been convertible. Additional Information About the Proposed HLTH Merger and Where to Find It: In connection with the proposed HLTH Merger, HLTH and WebMD expect to file, with the SEC, a proxy statement/prospectus as part of a registration statement regarding the proposed transaction. Investors and security holders are urged to read the proxy statement/prospectus because it will contain important information about HLTH and WebMD
Table of Contentsand the proposed transaction. Investors and security holders may obtain a free copy of the definitive proxy statement/prospectus and other documents when filed by HLTH and WebMD with the SEC at www.sec.gov or www.hlth.com or www.wbmd.com. Investors and security holders are urged to read the proxy statement/prospectus and other relevant material when they become available before making any voting or investment decisions with respect to the HLTH Merger. Investment in Auction Rate Securities. As of February 21, 2008, WebMD had a total of approximately $327 million in consolidated cash, cash equivalents and marketable securities, which includes approximately $169 million of investments in ARS. The types of ARS investments that WebMD owns are backed by student loans, 97% of which are guaranteed under the Federal Family Education Loan Program (FFELP), and all had credit ratings of AAA or Aaa when purchased. WebMD does not own any other type of ARS investments. The interest rates on these ARS are reset every 28 days by an auction process. Historically, these types of ARS investments have been highly liquid. In mid-February 2008, auctions for ARS investments backed by student loans failed, including auctions for ARS investments held by WebMD. The result of a failed auction is that these ARS continue to pay interest in accordance with their terms until the next successful auction; however, liquidity will be limited until there is a successful auction or until such time as other markets for these ARS investments develop. As of the date of this Annual Report, WebMD believes that the underlying credit quality of the assets backing its ARS investments has not been impacted by the reduced liquidity of these ARS investments. As a result of these recent events, WebMD is in the process of evaluating the extent of any impairment in its ARS investments resulting from the current lack of liquidity; however, WebMD is not yet able to quantify the amount of any such impairment. WebMD believes that any lack of liquidity relating to its ARS investments will not have an impact on its ability to fund its current operations.
Table of ContentsThis excerpt taken from the WBMD 10-Q filed May 10, 2007. Recent
Developments
Acquisition of eMedicine.com, Inc. On
January 17, 2006, we acquired eMedicine.com, Inc.
(“eMedicine”), a privately held online publisher of
medical reference information for physicians and other
healthcare professionals. The total purchase consideration for
eMedicine was approximately $25,382, comprised of $24,682 in
cash, net of cash acquired, and $700 of estimated acquisition
costs. The results of operations of eMedicine have been included
in our financial statements from January 17, 2006, the
closing date of the acquisition, and are included in the Online
Services segment.
Acquisition of Summex Corporation. On
June 13, 2006, we acquired Summex Corporation
(“Summex”), a provider of health and wellness programs
that include online and offline health risk assessments,
lifestyle education and personalized telephonic health coaching.
The Summex programs complement the online health and benefits
platform that we provide to employers and health plans.
Summex’s team of professional health coaches work
one-on-one
with employees and plan members to change high-risk behaviors
that lead to illness and high medical costs. The total purchase
consideration for Summex was approximately $30,191, comprised of
$29,691 in cash, net of cash acquired, and $500 of estimated
acquisition costs. In addition, the Company has agreed to pay up
to an additional $10,000 in cash over a two-year period if
certain financial milestones are achieved. The results of
operations of Summex will be included in our financial
statements from June 13, 2006, the closing date of the
acquisition, and are included in the Online Services segment.
Acquisition of Medsite. On July 19, 2006,
we entered into an agreement to acquire the interactive medical
education, promotion and physician recruitment businesses of
Medsite, Inc. (“Medsite”) for a purchase price of
$41,000 in cash. Medsite provides
e-detailing
services for pharmaceutical, medical device and healthcare
companies, including program development, targeted recruitment
and online distribution and delivery. Medsite leverages its
proprietary physician database for online recruitment and
participation into its programs. The results of operations of
Medsite will be included in the Online Services segment upon
closing, which is expected during the third quarter of 2006.
Table of Contents
This excerpt taken from the WBMD 10-Q filed May 10, 2007. Recent
Developments
Pending Acquisition of Subimo, LLC. On
November 2, 2006, we entered into a definitive agreement to
acquire all of the outstanding limited liability company
interests of Subimo, LLC (“Subimo”), a privately held
provider of healthcare decision support applications to large
employers, health plans and financial institutions. The purchase
price for Subimo is $60,000, comprised of $34,000 in cash
payable on the closing date and $26,000 in Class A Common
Stock (“shares”)
and/or cash
(the “Subsequent Consideration”), whichever we select
at the time the acquisition closes, such Subsequent
Consideration to be paid on the second anniversary of the
closing except as otherwise described below. The number of
Shares, if any, to be included in the Subsequent Consideration
shall be determined by dividing the amount of the Subsequent
Consideration to be paid in Shares by the five-day trailing
average price of Shares for a period prior to the closing date.
The purchase price is subject to adjustments, including an
adjustment based on the amounts of net working capital of Subimo
at closing, of indebtedness of Subimo at closing and of certain
transaction expenses payable on behalf of the sellers.
If the Subsequent Consideration includes Shares and the value of
the Subsequent Consideration is less than $15,600 when the
Shares are issued (or, in certain circumstances, when a
registration statement becomes effective), then we shall be
required to pay the amount by which the aggregate value of the
Subsequent Consideration is less than $15,600 minus any portion
of the Subsequent Consideration for which a right of setoff has
been applied by us to fulfill indemnification obligations of the
sellers. We will have the option of paying the amount described
in the preceding sentence in the form of cash or additional
Shares. Senior management of Subimo will be entering into
long-term employment agreements with Subimo effective as of the
closing date. The portion of the Subsequent Consideration
payable to certain of those members of senior management will be
paid on the fourth anniversary of the closing if the person is
terminated for cause under his or her employment agreement or
voluntarily terminates employment prior to the payment of the
Subsequent Consideration.
Table of Contents
The acquisition, which is subject to customary closing
conditions, is expected to close before the end of 2006 and will
be included in the Company’s Online Services segment from
the date of the closing of the acquisition.
Acquisition of eMedicine.com, Inc. On
January 17, 2006, we acquired eMedicine.com, Inc.
(“eMedicine”), a privately held online publisher of
medical reference information for physicians and other
healthcare professionals. The total purchase consideration for
eMedicine was approximately $25,382, comprised of $24,682 in
cash, net of cash acquired, and $700 of estimated acquisition
costs. The results of operations of eMedicine have been included
in our financial statements from January 17, 2006, the
closing date of the acquisition, and are included in the Online
Services segment.
Acquisition of Summex Corporation. On
June 13, 2006, we acquired Summex, a provider of health and
wellness programs that include online and offline health risk
assessments, lifestyle education and personalized telephonic
health coaching. The Summex programs complement the online
health and benefits platform that we provide to employers and
health plans. Summex’s team of professional health coaches
work
one-on-one
with employees and plan members to modify behaviors that may
lead to illness and high medical costs. The total purchase
consideration for Summex was approximately $30,191, comprised of
$29,691 in cash, net of cash acquired, and $500 of estimated
acquisition costs. In addition, the Company has agreed to pay up
to an additional $10,000 in cash over a two-year period if
certain financial milestones are achieved. The results of
operations of Summex have been included in our financial
statements from June 13, 2006, the closing date of the
acquisition, and are included in the Online Services segment.
Acquisition of Medsite. On September 11,
2006, we acquired the interactive medical education, promotion
and physician recruitment businesses of Medsite. Medsite
provides
e-detailing
services for pharmaceutical, medical device and healthcare
companies, including program development, targeted recruitment
and online distribution and delivery. In addition, Medsite
provides educational programs to physicians. The total purchase
consideration for Medsite was approximately $31,467, comprised
of $30,682 in cash, net of cash acquired, and $785 of estimated
acquisition costs. The results of operations of Mediste have
been included in the financial statements of the Company from
September 11, 2006, the closing date of the acquisition,
and are included in the Online Services segment.
This excerpt taken from the WBMD 10-K filed Mar 2, 2007. Recent
Developments
Redesign of WebMD.com and Launch of New Content Management
System. In February 2007, we launched a
redesigned version of WebMD.com that introduced an
enhanced level of personalization, information and community
interaction that enriches the user experience and further
empowers users of the site to make more informed health
decisions. We have also made improvements to the search
functions on WebMD.com that enable users to further
refine their searches by treatment, prevention, symptom and
related
Table of Contents
conditions so that they are provided with more relevant search
results. Also, our new content management system allows us to
create sites that are easier to navigate and that integrate
various types of applications. The site redesign and new content
management system are part of a series of improvements in the
infrastructure we use to store, manage, develop and display
content across The WebMD Health Network.
Reimbursement from Emdeon for Use of Net Operating Loss
Carryforwards. Emdeon and WebMD are parties
to an Amended and Restated Tax Sharing Agreement. Under the Tax
Sharing Agreement, Emdeon has agreed to reimburse WebMD, at the
current federal statutory tax rate of 35%, for net operating
loss carryforwards attributable to WebMD that were utilized by
Emdeon as a result of the sale transactions involving Emdeon
Business Services and Emdeon Practice Services that Emdeon
completed in 2006. On February 2, 2007, Emdeon and WebMD
executed a letter setting forth a procedure for Emdeon to make
the required reimbursement based on an estimate of the expected
amount of the reimbursement, subject to a later adjustment when
the amount has been finally determined. As contemplated by the
Tax Sharing Agreement and that letter, Emdeon transferred
$140 million in cash to WebMD on February 6, 2007.
Table of Contents
This excerpt taken from the WBMD 10-Q filed Nov 13, 2006. Recent
Developments
Pending Acquisition of Subimo, LLC. On
November 2, 2006, we entered into a definitive agreement to
acquire all of the outstanding limited liability company
interests of Subimo, LLC (“Subimo”), a privately held
provider of healthcare decision support applications to large
employers, health plans and financial institutions. The purchase
price for Subimo is $60,000, comprised of $34,000 in cash
payable on the closing date and $26,000 in Class A Common
Stock (“shares”)
and/or cash
(the “Subsequent Consideration”), whichever we select
at the time the acquisition closes, such Subsequent
Consideration to be paid on the second anniversary of the
closing except as otherwise described below. The number of
Shares, if any, to be included in the Subsequent Consideration
shall be determined by dividing the amount of the Subsequent
Consideration to be paid in Shares by the five-day trailing
average price of Shares for a period prior to the closing date.
The purchase price is subject to adjustments, including an
adjustment based on the amounts of net working capital of Subimo
at closing, of indebtedness of Subimo at closing and of certain
transaction expenses payable on behalf of the sellers.
If the Subsequent Consideration includes Shares and the value of
the Subsequent Consideration is less than $15,600 when the
Shares are issued (or, in certain circumstances, when a
registration statement becomes effective), then we shall be
required to pay the amount by which the aggregate value of the
Subsequent Consideration is less than $15,600 minus any portion
of the Subsequent Consideration for which a right of setoff has
been applied by us to fulfill indemnification obligations of the
sellers. We will have the option of paying the amount described
in the preceding sentence in the form of cash or additional
Shares. Senior management of Subimo will be entering into
long-term employment agreements with Subimo effective as of the
closing date. The portion of the Subsequent Consideration
payable to certain of those members of senior management will be
paid on the fourth anniversary of the closing if the person is
terminated for cause under his or her employment agreement or
voluntarily terminates employment prior to the payment of the
Subsequent Consideration.
The acquisition, which is subject to customary closing
conditions, is expected to close before the end of 2006 and will
be included in the Company’s Online Services segment from
the date of the closing of the acquisition.
Table of Contents
Acquisition of eMedicine.com, Inc. On
January 17, 2006, we acquired eMedicine.com, Inc.
(“eMedicine”), a privately held online publisher of
medical reference information for physicians and other
healthcare professionals. The total purchase consideration for
eMedicine was approximately $25,382, comprised of $24,682 in
cash, net of cash acquired, and $700 of estimated acquisition
costs. The results of operations of eMedicine have been included
in our financial statements from January 17, 2006, the
closing date of the acquisition, and are included in the Online
Services segment.
Acquisition of Summex Corporation. On
June 13, 2006, we acquired Summex, a provider of health and
wellness programs that include online and offline health risk
assessments, lifestyle education and personalized telephonic
health coaching. The Summex programs complement the online
health and benefits platform that we provide to employers and
health plans. Summex’s team of professional health coaches
work
one-on-one
with employees and plan members to modify behaviors that may
lead to illness and high medical costs. The total purchase
consideration for Summex was approximately $30,191, comprised of
$29,691 in cash, net of cash acquired, and $500 of estimated
acquisition costs. In addition, the Company has agreed to pay up
to an additional $10,000 in cash over a two-year period if
certain financial milestones are achieved. The results of
operations of Summex have been included in our financial
statements from June 13, 2006, the closing date of the
acquisition, and are included in the Online Services segment.
Acquisition of Medsite. On September 11,
2006, we acquired the interactive medical education, promotion
and physician recruitment businesses of Medsite. Medsite
provides
e-detailing
services for pharmaceutical, medical device and healthcare
companies, including program development, targeted recruitment
and online distribution and delivery. In addition, Medsite
provides educational programs to physicians. The total purchase
consideration for Medsite was approximately $31,467, comprised
of $30,682 in cash, net of cash acquired, and $785 of estimated
acquisition costs. The results of operations of Mediste have
been included in the financial statements of the Company from
September 11, 2006, the closing date of the acquisition,
and are included in the Online Services segment.
This excerpt taken from the WBMD 10-Q filed Aug 9, 2006. Recent
Developments
Acquisition of eMedicine.com, Inc. On
January 17, 2006, we acquired eMedicine.com, Inc.
(“eMedicine”), a privately held online publisher of
medical reference information for physicians and other
healthcare professionals. The total purchase consideration for
eMedicine was approximately $25,382, comprised of $24,682 in
cash, net of cash acquired, and $700 of estimated acquisition
costs. The results of operations of eMedicine have been included
in our financial statements from January 17, 2006, the
closing date of the acquisition, and are included in the Online
Services segment.
Acquisition of Summex Corporation. On
June 13, 2006, we acquired Summex Corporation
(“Summex”), a provider of health and wellness programs
that include online and offline health risk assessments,
lifestyle education and personalized telephonic health coaching.
The Summex programs complement the online health and benefits
platform that we provide to employers and health plans.
Summex’s team of professional health coaches work
one-on-one
with employees and plan members to change high-risk behaviors
that lead to illness and high medical costs. The total purchase
consideration for Summex was approximately $30,191, comprised of
$29,691 in cash, net of cash acquired, and $500 of estimated
acquisition costs. In addition, the Company has agreed to pay up
to an additional $10,000 in cash over a two-year period if
certain financial milestones are achieved. The results of
operations of Summex will be included in our financial
statements from June 13, 2006, the closing date of the
acquisition, and are included in the Online Services segment.
Acquisition of Medsite. On July 19, 2006,
we entered into an agreement to acquire the interactive medical
education, promotion and physician recruitment businesses of
Medsite, Inc. (“Medsite”) for a purchase price of
$41,000 in cash. Medsite provides
e-detailing
services for pharmaceutical, medical device and healthcare
companies, including program development, targeted recruitment
and online distribution and delivery. Medsite leverages its
proprietary physician database for online recruitment and
participation into its programs. The results of operations of
Medsite will be included in the Online Services segment upon
closing, which is expected during the third quarter of 2006.
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