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Health care fever burns

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Private equity players are raising their level of interest in health care information companies.

In the first week of September, there were two significant deals in the medical-publishing field involving private equity companies:

Vestar Capital Partners, along with members of MediMedia management, announced an agreement to acquire health care communications company MediMedia USA from a consortium of private equity firms. Financial terms were not disclosed, but a person familiar with the sale pegged the price at just above $600 million. MediMedia offers health management programs, patient education content and business applications to doctors, hospitals and drug companies.

Thompson Publishing Group (TPG), which provides subscription-based legal and regulatory information, acquired American Health Consultants (AHC), one of the largest publishers of subscription health care newsletters, from Thomson Corp. for an undisclosed sum. TPG is backed by private equity companies MidOcean Partners and Avista Capital Partners. AHC's health care and biotech products include BioWorld Today, Emergency Medicine Reports, Medical Device Daily and Same-Day Surgery.

There are several factors fueling private equity players' interest in health care information and research companies, including the graying of America?as 70 million baby boomers head toward retirement.

"For better or worse, health care is one of the largest segments of the economy, and will continue to grow," said Norm Alpert, a founding partner of Vestar and head of the company's media and communication group. He said MediMedia will step up its focus "on building patient-education content and helping large employers assess the health care risks among their employees."

TPG plans to leverage several of AHC's titles to introduce new products, said Tim Billings, a principal at MidOcean Partners.

Thomas O' Connor, a managing director at media investment bank Berkery, Noyes, which represented Thomson in the AHC transaction, said private equity players will continue to be on the lookout for health care information companies.

"They see the margins, which are much higher on a cash-flow basis than other business sectors. They see the macro growth trends and see the need for more information among consumers," he said. "The prices being paid for [health care information companies] are double-digit multiples, so you're going to see a lot more deals in the space. If you want liquidity, now is the time to sell."

Strategic players are also making moves in the health care media sector. In the same week that the MediMedia and AHC deals were announced, Springer Science+Business Media said it had acquired Humana Press. Financial terms were not disclosed.

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