Private equity giant KKR announced plans this morning to buy internet health information giant WebMD Holdings for $2.8 billion, a revenue multiple turning heads in the industry and proving once again the increasing value of revenue generating websites.
The company has just announced preliminary financial results for the three months ended June 30, 2017 showing that second quarter revenue is expected to be approximately $176 million, an increase of approximately 5% from the prior year period. Prior financial guidance for the quarter was $170 million to $173 million. First quarter revenue was $154.1 million, bringing the projected total results for the first half of the year to a projected $330 million, meaning that the deal should be valued at multiple of between 4 to 5 times revenue.
We have always held WebMD as an example of a great revenue generating website. Today’s announcement is just another strong indication of the increasing value of such sites as the market begins to better understand this new asset class.
