Rigrodsky & Long, P.A. Continues Investigation of HealthGrades, Inc. Buyout

Rigrodsky & Long, P.A. announces that it is investigating potential claims against the board of directors of HealthGrades, Inc. (“HealthGrades” or the “Company”) (Nasdaq:HGRD) concerning possible breaches of fiduciary duty and other violations of law related to the Company’s entry into an agreement to be acquired and taken private by an affiliate of Vestar Capital Partners V, L.P. (“Vestar”) in a transaction valued at approximately $294 million. (http://www.rigrodskylong.com/news/HealthGradesInc.-HGRD).

On August 10, 2010, Vestar commenced a cash tender offer of $8.20 in cash for each share of HealthGrades common stock outstanding (the “Tender Offer”). The Tender Offer will expire at 9:00 a.m., New York City time, on September 10, 2010, unless otherwise extended. In addition, executive officers of HealthGrades beneficially owning approximately 21% of HealthGrades’ fully diluted shares have entered into agreements to support the transaction and to tender or otherwise sell shares to Vestar. The investigation concerns whether HealthGrades’ board of directors failed to adequately shop the Company and obtain the best price possible for HealthGrades’ shareholders before entering into the agreement with Vestar.

As recent as July 28, 2010, HealthGrades issued its second quarter 2010 financial results wherein it announced an increase in ratings and advisory revenue of 25%. The Company also affirmed its full year guidance for ratings and advisory revenue growth of 20% over 2009 with an operating margin of between 19% to 22%. Indeed, Company Chairman and CEO, Kerry Hicks, commented: “We are pleased with our second quarter results. We are seeing significant contributions from both our Professional Services and Internet Business Groups.”

If you own the common stock of HealthGrades and purchased your shares before July 28, 2010, if you have information or would like to learn more about these claims, or if you wish to discuss these matters or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Seth D. Rigrodsky, Esquire or Noah R. Wortman, Case Development Director, of Rigrodsky & Long, P.A., 919 N. Market Street, Suite 980, Wilmington, Delaware, by telephone at (888) 969-4242, or by e-mail to info@rigrodskylong.com.

Rigrodsky & Long, P.A., with offices in Wilmington, Delaware and Garden City, New York, regularly litigates securities class, derivative and direct actions, shareholder rights litigation and corporate governance litigation, including claims for breach of fiduciary duty and proxy violations in the Delaware Court of Chancery and in state and federal courts throughout the United States.

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Health Grades, Inc. (MM) (NASDAQ:HGRD)
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