The Washington Post is out with a story we’ve also been working on — the possibility of an acquisition by Waterfront Media, owner of Everyday Health, of Steve Case’s Revolution Health in the form of a merger the two are the second and third largest health sites respectively. (I’m thinking of coining a new term for deals like this — acqui-merger.) In the past, when I have approached Revolution about the possibility of a sale, I’ve been told the company was not in sales talks. Since the last denial, word surfaced that Revolution’s banker Morgan Stanley was switching to sales or merger mode from raising capital. No response at all from Revolution to my request this time. As for Waterfront, CEO Ben Wolin tells me the company doesn’t comment on speculation but also said there is no deal to discuss and that he wouldn’t talk “for” Revolution.
Would Steve Case remain involved? “I don’t have a deal in place so there’s not much to talk about in terms of a merged entity.”
In this case, size definitely matters. “The size of the site should be appealing to anyone. I can tell you we are running into Revolution in the sales channel, versus last year where we really didn’t run into Revolution on sales calls, compete with them for sales dollars. Now it’s definitely viable in the marketplace, a huge difference from ’0’7 to ’08.”
More, including chart, after the jump…
Wolin does see consolidation ahead: “I think all the major health sites out there are talking to each other.” He unabashedly wants to make Everyday Health the top health site; currently, WebMD (NSDQ: WBMD) is in first. “We’re going to talk to every single health site and see if there are deals to be had to get to that milestone and I include Revolution in that group of companies. Whatever happens with Revolution, they’re the number 3 player right now and it’s going to shake up the market place.”
When I said we’d been told Waterfront is fundraising for a major acquisition, Wolin said, “We are always keeping investors abreast of our plans so if the right opportunity comes up we can move very quickly.”
As for how a deal might be structured — equity or cash, “every deal takes on different forms and it all depends on shareholders’ needs and what their priorities are. There’s no specific deal I can talk about. It doesn’t really matter to us whether a deal is an equity deal or a cash deal … The goal is to get to number one.”
Revolution bought its way from zero to a top-five health site in a matter of months. Back in March, when I interviewed him at our EconHealth conference, Case said he expected Revolution Health to be profitable “within the year.” Since then, the company has gone through multiple rounds of layoffs and backed out of the B2B business.
Chart via comScore