Healtheon/WebMD to Purchase Quintiles' Envoy for About $2.5 Billion

Internet health care company Healtheon/WebMD (HLTH Quote) will purchase Envoy, a unit of Quintiles Transnational (QTRN Quote), for about $2.5 billion, the companies announced Monday.

The market embraced the deal. In Monday morning trading, shares of Quintiles rose significantly, to 30 13/16, up 6 7/16, or 26%. Shares of Healtheon/WebMD were up 7 13/16, or 13%, to 67 1/2. (Quintiles closed up 3 3/16, or 13.11%, at 27 1/2. Healtheon/WebMD closed up 5 7/16, or 9.11%, at 65 1/8.)

Under the agreement, Healtheon/WebMD will pay $400 million in cash and about $2.1 billion in stock, or 35 million shares, to Quintiles. Quintiles will also issue Healtheon/WebMD a warrant to purchase up to 10 million shares of Quintiles common stock at $40 a share, exercisable for four years. The deal is expected to close in the first or second quarter of the year. ...