As managing editor of The credit crunch is one of the hottest stories in financial journalism right now. So when HLTH Corp. announced yesterday that it was terminating its merger agreement with WebMD Health Corp., it generated a lot of interest.
Why? After all, HLTH already owns 84 percent of WebMD. And neither company is exactly a household name.
Because of the credit crunch angles!
In a news release, The companies said they were dropping the plan so that WebMD would "not to be encumbered by $650 million in long-term debt that would be coming due in 18 to 36 months. By terminating their merger, HLTH and WebMD will retain financial flexibility and be in an advantageous position to pursue potential acquisition opportunities expected to be available to companies with significant cash resources in this period of financial market uncertainty."
Plus, they noted that the companies' attempt to sell Porex Corp., a company that makes plastic health-care products, was proving to be difficult: "The boards also took into consideration the fact that the sale of Porex has been delayed as a result of one of the leading potential buyers having difficulty arranging financing for a purchase because of conditions in the credit markets. HLTH is continuing its sales process for Porex with other potential buyers, but cannot provide assurance as to the timing or terms for a transaction."
Business journalists (Plastics News included) are watching for credit-crunch-related stories, so that's why this non-deal from HLTH and WebMD attracted a lot of attention.
If you're aware of any other deals or expansion projects impacted by the crunch, let me know.