IMS Health to Be Bought for $4 Billion by TPG, CPP

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, in a move to help the company restructure its business amid the shifting health care arena and sluggish economy.

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 were up nearly 24 percent in afternoon trading, having earlier set a new 52-week high of $21.09 on the news.

The leveraged buyout deal, which has committed debt financing from the private-equity firms and Goldman Sachs affiliates, is valued at $5.2 billion including assumed debt, according to IMS. LBOs, which involve the buyer borrowing most of the money to fund the deal and putting up the takeover target's assets as collateral, had fallen by the wayside during the recession as credit markets dried up. But this latest deal proves that private-equity firms are no longer sitting on the sidelines and are willing to jump back into the market.

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

IMS said its board of directors unanimously approved the buyout. TPG, the former Texas Pacific Group, 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.