N.Y. investment firm finishes buying HCIA

Layoffs are unlikely at health data firm's base in Baltimore

November 25, 1999|By Shanon D. Murray | Shanon D. Murray,SUN STAFF

HCIA Inc., the Baltimore health data company, said yesterday that it completed its deal to sell itself to a New York investment partnership for $135 million, or $11 a share in cash.

The company's new owner is VS&A Communications Partners III LP, a $1 billion private investment fund that is a subsidiary of Veronis, Suhler & Associates Inc., a New York investment banking firm.

As a result of the deal, HCIA will no longer be a publicly traded company, and will be delisted from the Nasdaq stock market.

HCIA officials did not return phone calls yesterday.

Merging with VS&A is expected to have little effect on most of HCIA's 500 employees, including 175 who work at the company's East Lombard Street headquarters, the company has said. Management is also expected to stay in place, HCIA has said.

VS&A makes investments in information, communications and media businesses. It looks for companies it deems promising, and then works with management to build those companies, typically for five to seven years, using capital from institutional investors. Then it looks for a buyer or takes the company public by selling shares to investors.

Founded in 1985, HCIA went public in 1995 at $14 a share, and its stock shot past $65 in a year and a half. But the company faltered after its $130 million acquisition of LBA Healthcare of Denver in July 1996.

The LBA deal moved HCIA, whose primary business is collecting, managing, and distributing comparative health care information, into the consulting business, but the strategy failed. It sold LBA in April for $7.5 million.

Pub Date: 11/25/99

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