Blackstone Group to Take Emdeon Private

Blackstone Group (NYSE: BX) has signed a definitive agreement to take health-care payment services company Emdeon (NYSE: EM) private in a transaction valued at about $3 billion.

Blackstone will pay $19 a share for the Nashville, Tenn., company; the stock closed Thursday at $18.35. Debt financing is being arranged by Bank of America Merrill Lynch, Barclays Capital and Citigroup.

Private equity firm General Atlantic bought a 52% stake in Emdeon in 2006, and Hellman & Friedman acquired the remaining stake in 2008. They took Emdeon public in August 2009. As part of the deal with Blackstone, Hellmann will retain an unspecified minority interest and a seat on the board.

Emdeon offers products and services designed to simplify and streamline health care billing for insurance companies, health care systems and physicians. The company also provides automated billing and document mailing services and insurance card printing, and it offers products specifically for dental and pharmaceutical offices. Revenue last year was $1 billion.

Action Items:

Bullish: Traders interested in ETFs invested in Blackstone might want to consider the following trades:

• Guggenheim Multi-Asset Income (NYSE: CVY) is up more than 30% in the past year.
• First Trust Value Line 100 Fund (NYSE: FVL) is up about 30% in the past year.

Bearish: Traders more interested in ETFs invested in Blackstone's publicly traded rival KKR (NYSE: KKR) may want to consider these alternate positions:

• PowerShares Listed Private Equity (NYSE: PSP) is up more than 40% in the past year.
• First Trust Value Line Dividend Index (NYSE: FVD) is up more than 29% in the past year.

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