IMS Health to be bought by investment funds TPG Capital, CPP Investment for $4 billion

IMS Health to be bought for $4 billion by TPG, CPP

NORWALK, Conn. — Health care data company IMS Health Inc. said Thursday it is being bought by investment funds TPG Capital and CPP Investment Board for $4 billion.

IMS shareholders are getting $22 per share under the deal, marking a 31 percent premium to the stock’s closing price of $16.81 on Wednesday.

Shares rose $3.97, or 23.6 percent, to $20.78 in midday trading. The stock earlier set a new 52-week high of $21.09.

The company, based in Norwalk, Conn., said the deal is valued at $5.2 billion including the assumption of debt.

The announcement comes after weeks of speculation following media reports in October that the company was on the auction block. On Oct. 20, the company said it is exploring a variety of strategic alternatives, but did not mention the possibility of a sale. A day prior to that, media reports prompted speculation that the company could be sold to a private equity firm, potentially garnering a 30 percent premium.

IMS said the deal has fully committed financing and its board of directors unanimously approved the buyout. TPG is the former Texas Pacific Group and has about $45 billion of assets under management. Its health care investments have included medical device maker Biomet, drug developer Axcan Pharma, and clinical research company Quintiles Transnational.

CPP Investment Board is one of Canada’s largest pension funds.

“This transaction enables our shareholders to realize substantial value from their investment in IMS with an immediate cash premium, while at the same time strengthening our position to capture long-term growth opportunities,” said IMS Chairman and CEO David R. Carlucci in a statement.

The company tracks pharmaceutical prescriptions and sales, and counts some of the largest drug developers as its clients. The data is often used by Wall Street to gauge how well a specific product is selling. IMS also provides auditing services for the health care industry along with analysis tools.

IMS’ competitors in the health care data field are mainly privately held companies, including TNS Group Holdings and Cegedim SA.

IMS did not say whether there would be any management changes. Representatives at IMS could not immediately be reached for comment.

IMS expects the deal to close by the end of the first quarter of 2010.

Deutsche Bank Securities Inc. acted as financial adviser to the company, while Sullivan & Cromwell LLP acted as legal adviser.