News

U.S. health care data company IMS Health RX-N says it has agreed to be acquired by investment funds TPG Capital and Canada's CPP Investment Board for $4-billion (U.S.).

IMS shareholders are getting $22 per share under the deal, marking a 31 per cent premium to the stock's closing price of $16.81 on the New York Stock Exchange on Wednesday.

The company, based in Norwalk, Conn., said Thursday the deal is valued at $5.2-billion including the assumption of debt. There was no word on the breakdown of each investor's share of the transaction.

TPG is the former Texas Pacific Group. The 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,” IMS chairman and CEO David Carlucci said in a release announcing the friendly transaction.

‘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 health care market.”

The transaction is slated to close by the 2010 first quarter, pending completion of IMS shareholders, regulatory approvals and customary closing conditions.

‘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 of 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.”

Jonathan Coslet, senior partner at TPG, said “IMS Health has consistently demonstrated it is the definitive source of critical data and services to the evolving health care industry.”

“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.”

IMS Health operates in more than 100 countries and is the world's leading provider of market intelligence to the pharmaceutical and health care industries. The company had 2008 revenues of US$2.3 billion.

TPG Capital is the global buyout group of TPG, which has $45-billion of assets under management and investments and offices around the world.

The CPP Investment Board invests the funds not needed by the Canada Pension Plan to pay current benefits on behalf of 17 million Canadian contributors and retirees.

At the end of June, the CPP Fund had $116.6-billion (Canadian) assets, of which $18.4-billion were private investments. The board has investments in stocks, real estate, inflation-linked bonds, infrastructure and fixed income financial instruments.

The CPP is headquartered in Toronto and has offices in London and Hong Kong and is governed and managed independently of the Canada Pension Plan.

In trading on the New York Stock Exchange on Thursday, IMS Health shares rose $4.08 (U.S.) to $20.89, a gain of 24.3 per cent on a volume of 11.9 million shares.