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Reports of this possibility first surfaced last month and now it's done ... Steve Case's ambitious Revolution Health Network will merge with Waterfront Media in a deal the parties value at $300 million, according to the New York Times. Revolution's sites will be absorbed into Waterfront's Everyday Health Network but RevolutionHealth.com will remain. Case will join the board while Benjamin Wolin remains CEO of Waterfront Media, with Revolution as a "major investor" in the expanded Waterfront Media and its 24 sites. Case will continue to head parent company Revolution LLC "and will continue to be involved with health companies."

Case's spin: he's not losing a company, he's gaining a CEO. He told the Times: "Clearly, getting strong C.E.O.'s to run each of the companies is our strategy. Ben's done a great job building a company."

When the Washington Post reported the possibility of a merger last month, Wolin was noncommittal but complimentary about Revolution in an interview with us. Speaking of consolidation, he said, "Whatever happens with Revolution, they're the #3 player right now and it's going to shake up the market place." That's certainly what Waterfront is hoping by merging EverydayHealth, which ranks #2 according to comScore Media Matrix, with Revolution. NYT adds their traffic and comes out ahead of WebMD (NSDQ: WBMD) but what remains to be seen is how much unduplicated traffic the two have.

Profits: Last spring, at our EconHealth conference, Case said Revolution Health would be profitable within the year. Wolin told the Times Waterfront was profitable on revenue of $50 million last year and expects to be profitable in 2009 with revenue of $100-plus million.

Rafat adds: Not clear: whether this was a cashless deal with stock swap, or if Waterfront had to pony up some money. We had been hearing about the troubles Waterfront was having in raising the money to get this deal done. Obviously they figured out the financial engineering part, one way or the other.

Updated: The companies are out with an official release: Doug McCormick, former CEO of Lifetime TV and iVillage and currently venture partner at Rho Ventures, will remain chairman of the company. Mike Keriakos will remain president of the company. The deal with close mid this month, and Revolution Health will become a significant shareholder of Waterfront Media and join existing Waterfront investors Rho Ventures, Scale Venture Partners, Foundation Capital, Neocarta Ventures, BEV Capital, Time Warner Investments and Village Ventures.

Waterfront's banker was Credit Suisse, while Revolution Health's was Morgan Stanley.

Revolution LLC-- the parent company of Revolution Health—will continue to be in the health sector through its other investments in RediClinic, Extend Health, Brainscope, and its only remaining media/community asste: SparkPeople, an online health and wellness community site.

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