All-stock transaction with combined 2015 revenue of $7.2 billion and combined equity market capitalization of $17.6 billion
- Broad range of healthcare information, technology and services solutions to drive efficiencies and insights across the entire life sciences product lifecycle, from R&D through commercial execution to real-world patient outcomes.
- Capabilities to address mission-critical healthcare operations with a market opportunity of more than $230 billion. Quintiles IMS will:
- Accelerate patient access to innovative medicines by increasing the productivity of the $100 billion spent on drug development
- Demonstrate the value and effectiveness of medicines as part of the $80 billion opportunity for Real-World Evidence (RWE) services and connected healthcare
- Drive a greater return on investment from the $50 billion that life sciences companies spend annually on commercial and field operations
- Create one of the world’s largest portfolios of healthcare information, deep therapeutic, domain, regulatory and commercial analytic expertise, as well as proprietary technology applications supported by more than 50,000 employees operating in 100+ countries.
- Assemble an experienced management team with proven track record of operational excellence.
- Offer compelling commercial, operational and financial synergies:
- Combined annual revenue growth rate anticipated to increase by 100 to 200 basis points by the end of year three
- Annual run-rate cost savings expected to be $100 million by the end of year three
- Optimized tax and capital structure
- Accretive to Adjusted Diluted EPS in 2017
Quintiles Chief Executive Officer, Tom Pike, said, “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.” Ari Bousbib, chairman and chief executive officer of IMS Health, stated, “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.”
- Improve clinical trial design, recruitment and execution in the $100 billion biopharma product development market by combining IMS Health’s rich, global information solutions with Quintiles’ industry-leading product development skills.
- Create a distinctive global Real-World Evidence solutions platform by combining a leading portfolio of anonymous patient records, technology-enabled data collection and observational research experts to address critical healthcare issues of cost, value and patient outcomes.
- Further differentiate commercial analytics and outsourcing services to support the efficiency of life sciences’ commercial organizations.
- Accelerate revenue growth, adding an anticipated 100 - 200 basis points to the combined annual growth rate by the end of year three.
- Expect to achieve annual run-rate cost savings of $100M by the end of year three.
- Accretive to Adjusted Diluted EPS in 2017
- Maintain financial flexibility with combined gross and net leverage as of December 31, 2015 of 4.0 times and 3.2 times Adjusted EBITDA, respectively.
- Optimize utilization of both companies’ tax assets.
Approvals and Time to Close
The transaction is subject to customary closing conditions, including regulatory approvals and approval by both IMS Health and Quintiles shareholders and is expected to close in the second half of 2016. Shareholders of IMS Health owning approximately 54 percent of the common stock of IMS Health and shareholders of Quintiles owning approximately 25 percent of the common stock of Quintiles have entered into agreements to vote the portion of their shares over which they have voting power to vote in favor of the transaction. The companies intend to refinance certain debt in connection with the merger. Committed financing has been obtained.
IMS Health’s legal advisor is Weil, Gotshal & Manges LLP and its financial advisor is Goldman, Sachs & Co. In addition, Morris, Nichols, Arsht & Tunnell LLP served as legal advisor to the independent committee of the IMS Health Board of Directors. Quintiles’ legal advisors are Bryan Cave LLP and Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, LLP, and its financial advisor is Barclays. Simpson Thacher & Bartlett LLP served as legal advisor to Quintiles’ independent directors.
Joint Conference Call and Webcast Details
Quintiles’ and IMS Health’s management teams will host a conference call and webcast to discuss the merger of equals at 8:00 a.m. Eastern Time on May 3, 2016. Interested parties are invited to listen to the live event and view the presentation slides via webcast on IMS Health’s Investor Relations website at http://ir.imshealth.com or on Quintiles’ Investor Relations website at www.Quintiles.com/investors. Participants can access the handouts before the teleconference begins. The discussion also will be available by dialing +1-800-926-5093 in the U.S. and Canada, or +1-212-231-2934 for international callers. A replay of the webcast will be available approximately two hours after the conclusion of the live event on May 3, 2016. To access the webcast recording, visit http://ir.imshealth.com or www.Quintiles.com/investors.
About IMS Health
IMS Health (NYSE:IMS) is a leading global information and technology services company providing clients in the healthcare industry with end-to-end solutions to measure and improve their performance. Our 7,000 services experts connect configurable SaaS applications to 15+ petabytes of complex healthcare data in the IMS One™ cloud platform, delivering unique insights into diseases, treatments, costs and outcomes. The company’s 15,000 employees blend global consistency and local market knowledge across 100 countries to help clients run their operations more efficiently. Customers include pharmaceutical, consumer health and medical device manufacturers and distributors, providers, payers, government agencies, policymakers, researchers and the financial community. As a global leader in protecting individual patient privacy, IMS Health uses anonymous healthcare data to deliver critical, real-world disease and treatment insights. These insights help biotech and pharmaceutical companies, medical researchers, government agencies, payers and other healthcare stakeholders to identify unmet treatment needs and understand the effectiveness and value of pharmaceutical products in improving overall health outcomes. Additional information is available at www.imshealth.com.
Quintiles (NYSE:Q) helps biopharma and other healthcare companies improve their probability of success by connecting insights from our deep scientific, therapeutic and analytics expertise with superior delivery for better outcomes. From advisory through operations, Quintiles is the world’s largest provider of product development and integrated healthcare services, including commercial and observational solutions. Conducting operations in approximately 100 countries, Quintiles is a member of the Fortune 500 and has been named to Fortune’s list of the “World’s Most Admired Companies.” To learn more, visit www.quintiles.com. Cautionary Statements
Regarding Forward Looking Statements
This communication contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “will,” “would,” “target,” similar expressions, and variations or negatives of these words. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about the potential timing or consummation of the proposed transaction or the anticipated benefits thereof, including, without limitation, future financial and operating results. IMS Health and Quintiles caution readers that these and other forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statements. Important risk factors that may cause such a difference include, but are not limited to risks and uncertainties related to (i) the ability to obtain shareholder and regulatory approvals, or the possibility that they may delay the transaction or that such regulatory approval may result in the imposition of conditions that could cause the parties to abandon the transaction, (ii) the risk that a condition to closing of the merger may not be satisfied; (iii) the ability of IMS Health and Quintiles to integrate their businesses successfully and to achieve anticipated cost savings and other synergies, (iv) the possibility that other anticipated benefits of the proposed transaction will not be realized, including without limitation, anticipated revenues, expenses, earnings and other financial results, and growth and expansion of the new combined company’s operations, and the anticipated tax treatment, (v) potential litigation relating to the proposed transaction that could be instituted against IMS Health, Quintiles or their respective directors, (vi) possible disruptions from the proposed transaction that could harm IMS Health’s or Quintiles’ business, including current plans and operations, (vii) the ability of IMS Health or Quintiles to retain, attract and hire key personnel, (viii) potential adverse reactions or changes to relationships with clients, employees, suppliers or other parties resulting from the announcement or completion of the merger, (ix) potential business uncertainty, including changes to existing business relationships, during the pendency of the merger that could affect IMS Health’s and/or Quintiles’ financial performance, (x) certain restrictions during the pendency of the merger that may impact IMS Health’s or Quintiles’ ability to pursue certain business opportunities or strategic transactions, (xi) continued availability of capital and financing and rating agency actions, (xii) legislative, regulatory and economic developments and (xiii) unpredictability and severity of catastrophic events, including, but not limited to, acts of terrorism or outbreak of war or hostilities, as well as management’s response to any of the aforementioned factors. These risks, as well as other risks associated with the proposed transaction, will be more fully discussed in the joint proxy statement/prospectus that will be included in the registration statement on Form S-4 that will be filed with the SEC in connection with the proposed transaction. While the list of factors presented here is, and the list of factors to be presented in the registration statement on Form S-4 are, considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward looking statements. Consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on IMS Health’s or Quintiles’ consolidated financial condition, results of operations, credit rating or liquidity. Neither IMS Health nor Quintiles assumes any obligation to provide revisions or updates to any forward looking statements, whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws.
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