TPG, partners acquire IMS Health in $5.2 billion deal

Investment funds managed by Fort Worth-based TPG Capital as well as the CPP Investment Board will acquire IMS Health, a provider of market intelligence to the pharmaceutical and healthcare industries, as part of a $5.2 billion deal.

TPG, a global buyout group, and CPP Investment Board will pick up IMS Health in a transaction with a total value of $5.2 billion, including the assumption of debt, IMS announced today.

The agreement was unanimously approved by the IMS Board of Directors based on the recommendation of the Transaction Committee that was established to undertake a review of IMS’s strategic alternatives. Under the agreement, IMS shareholders will receive $22 cash for each share of IMS common stock they own, representing a premium of approximately 50 percent over the closing share price on Oct. 16, the last trading day prior to public speculation that IMS was considering its strategic alternatives.

Under the terms of the agreement, financing for the acquisition will consist of a combination of equity to be invested by TPG and CPPIB and debt financing to be provided by “certain affiliates of Goldman, Sachs & Co., including its principal loan and mezzanine funds,” according to the IMS announcement.

“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 the announcement. “With the backing of world-class private equity partners, we will continue our focus on expanding into new markets, further improving the quality and depth of offerings we deliver to our clients, and playing a bigger role in the healthcare market.”

Completion of the transaction is subject to approval of IMS shareholders, regulatory approvals and customary closing conditions and is expected to occur by the end of the first quarter of 2010.

“IMS Health has consistently demonstrated it is the definitive source of critical data and services to the evolving healthcare industry,” said Jonathan Coslet, senior partner at TPG, in the announcement. “We are pleased to join with our long-time partner, CPP Investment Board, and a talented management team to continue the growth of this outstanding franchise.”

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