King And Spalding

Blackstone to Buy Health-Care Biller Emdeon in Deal Valued at $3 Billion

Blackstone Group LP (BX) , the world’s biggest private-equity firm, agreed to buy Emdeon Inc. (EM) for about $3 billion, taking the health-care billing firm private again after two years as a public company.

Emdeon shareholders will receive a cash payment of $19 a share, the Nashville, Tennessee-based software maker said in a statement today. The deal would give investors a 44 percent premium over the closing price for Emdeon stock on July 26, the day before news broke that the two sides were talking.

Emdeon went public in 2009 and won’t provide New York-based Blackstone a lot of waste to easily cut, said Bret D. Jones, an Oppenheimer & Co. analyst in New York . Instead, the equity firm probably aims to expand Emdeon’s share of the growing market for companies that help doctors, hospitals and insurers exchange electronic medical records, Jones said.

“Emdeon was private only three years ago, so it’s hard to believe that their cost structure could be that inflated,” he said by telephone. “That tells me they’re going to have to do something to increase revenues, and the strategy to do that is probably going to be to take over the clinical-data market.”

The software maker’s biggest shareholders, private-equity firms Hellman & Friedman LLC and General Atlantic LLC, have agreed to the acquisition, the statement said. Hellman & Friedman, based in San Francisco , will maintain a “significant minority equity interest” in the company, it said.

Blackstone and Hellman & Friedman “each have an in-depth understanding of our business and industry, and will be tremendous partners as we continue to pursue our strategy of making health-care efficient,” George Lazenby, Emdeon’s chief executive officer, said in the statement. “We are looking forward to building upon our leadership position in health-care information technology and services.”

Emdeon rose $2.10, or 13 percent, to $18.35 at 4:01 p.m. in New York Stock Exchange composite trading. The shares have risen 36 percent this year.

Emdeon is the leading provider of financial clearinghouse services to process claims for doctors, hospitals and insurers, said Oppenheimer’s Jones. Sales in that market have slowed the past two years as the weak economy and higher copays cut into Americans’ use of medical services, he said.

The company has less of a presence in transmitting medical data, an area likely to become a “multibillion-dollar market,” boosted by government stimulus spending to encourage the use of electronic health records, Jones said.

Top-flight firm King & Spalding pulls out of deal with GOP House ...

Republican lawmakers, at least in Colorado, are fond of pointing to America’s vast domestic fossil fuel reserves as a largely untapped means of ending the nation’s dependency on overseas energy imports. But there isn’t a lot of talk these days about getting other countries hooked on our homegrown power sources. According to the second-quarter earnings report for Arch Coal, the St. Louis, Mo., company that owns Colorado’s West Elk Mine, 2011 is expected to be a banner year – based at least in part on increasing overseas exports.

Under pressure from gay rights groups, Atlanta-based international law firm King & Spalding announced it was pulling out of a deal struck with Republican leaders to defend the Defense of Marriage Act on behalf of the House of Representatives. Paul Clement , the high-powered attorney who spearheaded the arrangement for the firm, has resigned and announced he will now take up the case as a member of conservative-politics-associated firm Bancroft PLLC.

“In reviewing this assignment…, I determined that the process used for vetting this engagement was inadequate,” said King & Spalding chairman Robert Hays in a statement. “Ultimately I am responsible for any mistakes that occurred and apologize for the challenges this may have created.”

GOP House Speaker John Boehner announced in February that Congress would defend DOMA after the Obama administration announced it would no longer defend the law in court. In a letter to congressional leaders explaining the move, Attorney General Eric Holder said he thought DOMA unconstitutionally discriminated against gay people.

Christian-right groups like Colorado Springs-based Focus on the Family celebrated the arrangement House leaders made with King & Spalding a week ago , pointing to Clement’s stellar resume and the firm’s global reputation and vast resources.

Gay-rights advocates like the Human Rights Campaign, however, underlined King & Spalding’s reputation heretofore as an equal-opportunity employer. HRC announced it would launch a campaign against the firm’s decision to defend DOMA that would include ads in mainstream and legal publications and outreach to the firm’s clients.

As Amanda Terkel at the Hufffington Post reports, pro-gay law groups were especially concerned with a clause in the contract King & Spalding signed with the House that barred any of the firm’s attorneys from working to “alter or amend” DOMA, even on a pro-bono basis.

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