IMS Health And Quintiles Transnational To Merge In All-Stock Transaction

IMS Health Holdings, Inc.

and Quintiles Transnational Holdings Inc.

revealed that their respective boards approved a definitive merger deal involving an all-stock merger of equals transaction. Following that the two companies would be combined. According to the company, the merged entity would be named Quintiles IMS Holdings, Inc. The deal is predicted to close in the second half of the current year. The deal would be accretive to adjusted earnings next year. IMS Health and Quintiles said that based on the closing of IMS Health and Quintiles common stock prices on May 2, the equity market capitalization of the merged companies would be over $17.6 billion while the enterprise value was over $23 billion. The companies added that their 2015 pro forma reported revenue for Quintiles IMS was $7.2 billion while their adjusted EBITDA was $1.7 billion. The two companies' adjusted unlevered free cash flow was $1.3 billion. According to the merger agreement, IMS Health would get a fixed exchange ratio of 0.384 shares of Quintiles common stock for each share of IMS Health common stock. Once the transaction was completed, IMS Health shareholders would have approximately 51.4 percent of the shares of the merged entity whereas Quintiles shareholders would have approximately 48.6 percent of the combined company. IMS Health Chairman and CEO, Ari Bousbib, commented that "Together our solutions will enable differentiation in the CRO market, advance Real-World Evidence capabilities, and deliver comprehensive commercial solutions for our clients. This powerful combination brings together leading technology and analytics with deep scientific expertise delivered on a global scale by our 50,000 immensely talented professionals in more than 100 markets. Our combined business will accelerate growth, yield greater operating efficiencies and provide more flexibility for future expansion." Similarly, Quintiles CEO, Tom Pike, reacted to the deal by saying that, "This combination addresses life-science companies' most pressing needs: to transform the clinical development of innovative medicines, demonstrate the value of these medicines in the real world, and drive commercial success. We are bringing together two best-in-class leaders. I'm confident that together we will make our clients even more successful." While IMS closed higher by 0.86%, Quintiles gained 0.04% on Monday.