As predicted a few weeks ago, IMS Health has sold itself to private equity for $5.2 billion ($4 billion in actual transaction, plus the acquisition of another $1.2 billion in debt). The buyers were private equity firms Texas Pacific Group (TPG) and the Canadian Pension Plan (CPP) Investment Board. The deal works out to $22 a share. I’d look for the new owners to break up the company – slipping the high-profit prescription data business from the consulting organization.
IMS has really struggled since the current CEO, David Carlucci, took over. The company recently lost a very high-profile legal challenge against the State of New Hampshire prohibiting sales of prescription data that identify individual physicians (there’s a little more to it). IMS vigorously defended itself in a costly legal battle that tapped the company of a significant amount of cash and proved to be a considerable distraction with customers.
Already, some law firms are looking into the deal on behalf of shareholders. While the deal represents a nice premium over the last 12 months (IMS’ shares have been in the toilet since long before the recession hit), it is well below the $31.49 of October 2007 – just two short years ago (and the high $20’s where the stock has traded for much of the past 5 years).
This deal is a rather significant windfall for IMS executives who received thousands of shares over the last few years. This deal is also the end of the once-formidable pharmaceutical market research firm. The only remaining question is: which company will take over reins in the industry?
IMS has really struggled since the current CEO, David Carlucci, took over. The company recently lost a very high-profile legal challenge against the State of New Hampshire prohibiting sales of prescription data that identify individual physicians (there’s a little more to it). IMS vigorously defended itself in a costly legal battle that tapped the company of a significant amount of cash and proved to be a considerable distraction with customers.
Already, some law firms are looking into the deal on behalf of shareholders. While the deal represents a nice premium over the last 12 months (IMS’ shares have been in the toilet since long before the recession hit), it is well below the $31.49 of October 2007 – just two short years ago (and the high $20’s where the stock has traded for much of the past 5 years).
This deal is a rather significant windfall for IMS executives who received thousands of shares over the last few years. This deal is also the end of the once-formidable pharmaceutical market research firm. The only remaining question is: which company will take over reins in the industry?