IMS Health May Buy AlphaImpactRX: What's It Mean?

On Monday, Barclays issued a report highlighting IMS Health Holdings Inc.

and their potential acquisition of AlphaImpactRX. The report comes amid news of an FTC antitrust clearance notice. In the report Barclays analysts Manav Patnaik and Eric Percher had several questions following news of the potential acquisition which included: 1.What is the financial rationale of the deal? Barclays analysts question the growth potential of AlphaImpactRX saying that the company has only expanded 2.8 percent year over year. The deal would be greater than 2x of IMS Health's M&A contribution per year thus analysts believe that the deal may be in response to slowing organic growth which would warrant heightened M&A activity. 2. What is the strategic rationale of the deal? Barclays notes that AlphaImpactRX is the largest research services firm focused on biopharma in the United States. This could prove to be one of the primary reasons for the potential acquisition, however, the analysts question how IMS Health plans to take advantage of the research capabilities of AlphaImpactRX. The analysts go on to say that IMS Health wants to engage in "tactical pricing" which could be aided by the acquisition of AlphaImpactRX and the strategic research capabilities that the firm provides. IMS Holdings last traded at $25.66.