TPG Capital, alongside the Canada Pension Plan Investment Board, will acquire IMS Health, one of the world’s leading providers of market intelligence to the pharmaceutical and healthcare industries, in a deal valued at $5.2bn.
This is understood to be the biggest leveraged buy-out so far this year.
The parties have agreed on the deal, which will include the assumption of New York Stock Exchange-listed IMS’s debt.
IMS shareholders will receive $22 for each share of IMS common stock they own, representing a premium of approximately 50 per cent over the closing share price on Friday 16 October, the last trading day prior to public speculation that IMS was considering how to move forward.
IMS Health chairman and CEO David Carlucci said, “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 healthcare market.”
The debt financing in this deal is to be provided by Goldman Sachs, including its principal loan and mezzanine funds.
A Moody’s report released today has showed that the ten largest companies acquired by private equity firms with debt between 2004 and 2007 are performing worse than similarly sized companies that were not acquired in such deals. According to the report, four of the ten companies have defaulted on their debts, and at least three have carried out distressed exchanges to reduce the debt brought on by private equity transactions.
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