We already knew that megadeals were back. And now we see that private equity is back too, as Texas Pacific Group (TPG) is acquiring health services company IMS Health (RX) for $5 billion.
Shares of IMS are up about 20%, and the overall market is in rally mode.
NORWALK, Conn.–(BUSINESS WIRE)–IMS Health, the world’s leading provider of market intelligence to the pharmaceutical and healthcare industries, today announced that it has entered into a definitive agreement to be acquired by investment funds managed by TPG Capital (“TPG”) and the CPP Investment Board (“CPPIB”) in a transaction with a total value of $5.2 billion, including the assumption of debt.
The agreement was unanimously approved by the IMS Board of Directors based upon 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 $22.00 cash for each share of IMS common stock they own, representing a premium of approximately 50 per cent over the closing share price on Friday, October 16, 2009, the last trading day prior to public speculation that IMS was considering its strategic alternatives.
The transaction has fully committed financing, consisting 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.
“This transaction enables our shareholders to realise 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. “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.”
“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, TPG. “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.”
“We are pleased to make a significant investment in IMS Health which is the market leader in its industry with a strong customer base,” said Mark Wiseman, Senior Vice President, Private Investments, for CPP Investment Board. “CPPIB and TPG are like-minded, long-term investors and we look forward to working together and in partnership with management to help grow the business.”
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.
Foros Securities LLC acted as financial advisor to the Transaction Committee of the Board. Lazard rendered a fairness opinion to the Transaction Committee. Morris, Nichols, Arsht & Tunnell LLP acted as legal advisor to the Transaction Committee.
Deutsche Bank Securities Inc. acted as financial advisor to the Company, and Sullivan & Cromwell LLP acted as legal advisor to the Company.
Goldman, Sachs & Co., BofA Merrill Lynch, Barclays Capital, Evercore Partners, and J.P. Morgan acted as financial advisors to TPG and CPPIB. Ropes & grey LLP acted as legal advisor to TPG and CPPIB. CPPIB was also separately advised by Torys LLP.