Mountain Acquisition Corp. and Mountain Merger Sub Corp.,
affiliates of Vestar Capital Partners V, L.P. (“Vestar”) formed for the purpose of
acquiring Health Grades, Inc. (Nasdaq: HGRD) (“HealthGrades”), and HealthGrades today
announced the extension of the offer period for the previously
announced tender offer for all of the outstanding shares of common
stock of HealthGrades, at a purchase price of $8.20 per share in
cash, without interest and less any applicable withholding taxes,
until 9:00 AM, New York City time, on Thursday, September 16,
2010.
As announced previously, on August 10, 2010, Mountain
Acquisition Corp. and Mountain Merger Sub Corp. commenced a tender
offer for all outstanding shares of common stock of HealthGrades at
a price of $8.20 per share in cash, without interest and less any
applicable withholding taxes. The tender offer was previously set
to expire at 9:00 AM, New York City time, on Friday, September 10,
2010.
The depositary for the tender offer has advised that as of 5:00
PM, New York City time, on Thursday, September 9, 2010,
approximately 26,298,372 HealthGrades shares had been validly
tendered and not withdrawn (excluding shares tendered by notices of
guaranteed delivery). These shares, in addition to the restricted
and option shares (net of withholding for taxes and costs of
exercise) that are committed to be sold to Mountain Merger Sub
Corp. pursuant to the previously disclosed support agreements with
certain executives, represent approximately 89.8% of the total
outstanding shares of HealthGrades on a fully diluted basis,
excluding certain shares to be issued pursuant to a non-competition
agreement with one of the executives. Including the shares to be
issued pursuant to such non-competition agreement, such tendered
and committed shares represent approximately 90.3% of the total
outstanding shares of HealthGrades on a fully diluted basis, such
that Mountain Merger Sub Corp. would be permitted to consummate a
“short-form” merger under Delaware law. Excluding shares tendered
pursuant to the support agreements, the tendered shares represent
approximately 71.5% of the total outstanding shares on a
fully-diluted basis, excluding certain shares to be issued pursuant
to a non-competition agreement with one of the executives, and
approximately 87.6% of all shares not subject to support
agreements. Except for the extension of the expiration date of the
tender offer, all other terms and conditions of the tender offer
remain unchanged.
The parties have agreed to amend the previously announced
Agreement and Plan of Merger, among Mountain Merger Sub Corp.,
Mountain Acquisition Corp., Mountain Acquisition Holdings, LLC, and
HealthGrades, dated July 27, 2010, as amended on August 9, 2010, to
extend the offer in order to provide the parties and HealthGrades’
stockholders with additional time to continue to evaluate their
alternatives and potential actions in light of the ruling issued by
the Delaware Court of Chancery on September 3, 2010 in the action
styled In re Health Grades, Inc. Shareholders Litigation, which
ruling was previously disclosed by Vestar and its affiliates and by
HealthGrades in filings with the Securities and Exchange
Commission. Subject to the terms of the merger agreement, as
amended, Vestar and HealthGrades remain committed to consummating
the tender offer and the merger.
About Vestar Capital Partners
Vestar Capital Partners is a leading global private equity firm
with more than 22 years of experience investing in middle-market
companies with $7 billion in assets currently under
management. From its headquarters in New York, and through its five
offices in the U.S. and Europe, Vestar employs its value-oriented
investment approach across a variety of industries in companies
ranging in total enterprise value from $250 million to
$3 billion and operations in five key industry sectors:
consumer/services, diversified industries, healthcare,
media/communication, and financial services. Vestar invests and
collaborates with incumbent management teams, family owners or
corporations in a creative, flexible and entrepreneurial way to
build long-term franchise and enterprise value. Since 1988, Vestar
has completed 66 investments in companies with total enterprise
value of over $30 billion. Vestar has operations in New York,
Boston, Denver, Milan, Munich and Paris. For more information,
please visit www.vestarcapital.com.
About HealthGrades
HealthGrades is the leading independent healthcare ratings
organization, providing quality ratings, profiles and cost
information on the nation’s hospitals, physicians, nursing homes
and prescription drugs. Millions of patients and many of the
nation’s largest employers, health plans and hospitals rely on
HealthGrades’ quality ratings, advisory services and
decision-support resources. The HealthGrades network of websites,
including HealthGrades.com and WrongDiagnosis.com, is a top-ten
health property according to ComScore and is the Internet’s leading
destination for patients choosing providers. More information on
the company can be found at www.healthgrades.com.
Additional Information and Where to Find It
This announcement is neither an offer to purchase nor a
solicitation of an offer to sell securities. An affiliate of Vestar
has filed a Schedule TO Tender Offer Statement (including
amendments thereto and an offer to purchase, a related letter of
transmittal, and other offer documents) with the
U.S. Securities and Exchange Commission (“SEC”), and HealthGrades has filed a
Schedule 14D-9 Solicitation/Recommendation Statement (including
amendments thereto) with respect to the offer. Holders of shares of
HealthGrades are urged to read the relevant tender offer documents
because they contain important information that holders of
HealthGrades securities should consider before making any decision
regarding tendering their securities. Those materials and all other
documents filed by Vestar, Mountain Acquisition Corp. or Mountain
Merger Sub Corp. with the SEC are available at no charge on the
SEC’s web site at www.sec.gov. The Schedule TO Tender Offer
Statement, Schedule 14D-9 Solicitation/Recommendation Statement and
related materials may be obtained for free by directing such
requests to Innisfree M&A Incorporated, 501 Madison Avenue,
20th Floor, New York, New York 10022, Toll-Free Telephone: (888)
750-5834.
In addition, HealthGrades files annual and special reports and
other information with the SEC. You may read and copy any reports
or other information filed by HealthGrades at the SEC public
reference room at 100 F Street, N.E., Washington, D.C. 20549.
Please call the SEC at 1-800- SEC-0330 for further information on
the public reference room. HealthGrades’ filings with the SEC are
also available to the public from commercial document-retrieval
services and at the website maintained by the SEC at
www.sec.gov.
Safe Harbor Statement
This press release contains forward-looking statements,
including those relating to the anticipated acquisition of
HealthGrades by an affiliate of Vestar. These forward-looking
statements may be identified by words such as “anticipate,”
“expect,” “suggest,” “plan,” “believe,” “intend,” “estimate,”
“target,” “project,” “could,” “should,” “may,” “will,” “would,”
“continue,” “forecast,” and other similar expressions. Each of
these forward-looking statements involves risks and uncertainties.
Actual results or developments may differ materially from those,
express or implied, in these forward-looking statements. Various
factors may cause differences between current expectations and
actual results or developments, including risks and uncertainties
associated with the anticipated acquisition. These risks and
uncertainties associated include, among others, uncertainties as to
how many of HealthGrades’ stockholders will tender their shares
pursuant to the tender offer, uncertainties as to whether competing
offers will be made, and the possibility that various closing
conditions to the tender offer or the subsequent merger may not be
satisfied or waived, and the risk that stockholder litigation in
connection with the tender offer and subsequent merger may result
in significant costs of defense, indemnification and liability.
Other factors that may cause HealthGrades’ actual results or
developments to differ materially from those expressed or implied
in the forward-looking statements in this press release are
discussed in HealthGrades’ filings with the SEC, including the
“Risk Factors” sections of HealthGrades’ periodic reports on Form
10-K and Form 10-Q filed with the SEC. Copies of HealthGrades’
filings with the SEC may be obtained at the “Investor Relations”
section of HealthGrades’ website at www.healthgrades.com or at
www.sec.gov. All forward-looking statements in this announcement
are qualified in their entirety by this cautionary statement.
Unless required by law, Health Grades does not undertake to update
its forward-looking statements.
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