(Reuters) HealthGrades Inc (HGRD.O), which provides ratings and profiles on hospitals, nursing homes and physicians, agreed to be acquired by Vestar Capital Partners, a private equity firm, for about $294 million.

HealthGrades said the $8.20 per share deal represents a 29 percent premium to its stock's Tuesday closing price of $6.34.

HealthGrades has a very valuable database that would cost someone a lot of money to duplicate, Gar Wood Securities analyst Jackson Spears said.

"HealthGrades gets about 23 million unique visitors per month on its website, and those visitors are largely clinical...that's attractive traffic," he said."

Spears said while Vestar was paying a fair price, a strategic buyer, like a competitor, could probably have paid more for the value of HealthGrades' database.

Under the terms of the deal, an affiliate of Vestar will commence an all-cash tender offer no later than Aug. 10.

HealthGrades said its executive officers owning about 21 percent of its stock have entered into agreements to support the deal and sell shares to Vestar's affiliate.

Vestar does not already have a stake in HealthGrades.

Avondale Partners analyst Sean Jackson, who viewed HealthGrades as a pretty attractive property, said it has been offered a fair price by Vestar.

"Vestar holds several portfolio companies and so it will probably merge HealthGrades with one of those," Jackson said.

Shares of HealthGrades were up 28 percent to $8.11 in afternoon trade. They touched its lifetime high of $8.15 earlier in the session on Nasdaq. (Reporting by Shailesh Kuber in Bangalore; Editing by Don Sebastian, Prem Udayabhanu)