After the announcement to take over Health Grades, Inc by an affiliate of Vestar Capital Partners V, L.P. an investigation on behalf of current investors of Health Grades, Inc. (NASDAQ:HGRD) over possible shareholder claims based on breach of fiduciary duty in connection with takeover attempt by Vestar Capital Partners V, L.P. was announced.

Health Grades, Inc., located in Golden, CO, provides ratings of hospitals, nursing homes and home health agencies. On Wednesday, July 28, 2010, Health Grades, Inc. (HGRD) and Vestar Capital Partners V, L.P. announced an agreement for an affiliate of Vestar Capital Partners V, L.P. to acquire all of the outstanding shares of HealthGrades, Inc. for $8.20 per share. According to Health Grades, Inc its board of directors unanimously approved the agreement and the offer represents a premium of approximately 32% over HealthGrades' 30-day average closing stock price, and a premium of approximately 29% over the closing price of HealthGrades' common stock on July 27, 2010, the last trading day prior to today's announcement.

Health Grades, Inc. (HGRD) traded before the takeover news at about $6.50, and jumped in response to the announcement to its 52weekHigh oof $8.15 per share on Wednesday, July 28, 2010. But at least one analyst has set a price target of $9.00 per share for HealthGrades stock. Health Grades, Inc. was able to increase its revenue over the past three years. Health Grades, Inc. reported $36.17million Total Revenue in 2007, $39.69million in 2008, and $52.52million in 2009. Over the same time period Health Grades, Inc. Net Income went from $6.75million in 2007 to $7.10million in 2009.

The investigation by a law firm concerns whether Vestar Capital Partners V, L.P., as well as the directors of Health Grades, Inc. breached their fiduciary duties by not acting in Health Grades (NASDAQ:HGRD) shareholders' best interests in connection with the sale process of Health Grades, Inc, whether the Health Grades Board of Directors breached their fiduciary duty to Health Grades, Inc. (NASDAQ:HGRD) stockholders by failing to adequately shop the Company prior to entering into the agreement, whether the Board of Directors breach their fiduciary duties by not seeking a deal that will provide better value for Health Grades, Inc., and whether Vestar Capital Partners V, L.P. is underpaying for Health Grades, Inc. (HGRD), thus unlawfully harming HGRD stockholders.