IMS Health Holdings, Inc.
Robbins Arroyo LLP: Combination of IMS Health Holdings, Inc. (IMS) with Quintiles Transnational Holdings Inc. (Q) May Not Be in Shareholders’ Best Interests
May 3, 2016 (San Diego, CA & Danbury, CT) – Shareholder rights attorneys at Robbins Arroyo LLP are investigating the proposed combination of IMS Health Holdings, Inc. (NYSE: IMS) with Quintiles Transnational Holdings Inc. (NYSE: Q). On May 3, 2016, the two companies announced the signing of a definitive merger agreement pursuant to which Quintiles will merge with IMS in an all-stock merger of equals transaction. Under the terms of the agreement, IMS shareholders will receive 0.384 shares of Quintiles for each share of IMS they own, the value of which is equivalent to $26.53 per share of IMS.
Is the Proposed Acquisition Best for IMS and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at IMS is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $26.53 merger consideration represents a premium of only 0.1% based on IMS’ average one-month closing price. This premium is significantly below the average one-month premium of nearly 38.44% for comparable transactions within the past year. Further, the $26.53 merger consideration is significantly below the target price of eight analysts ranging from $32.00 set by an analyst at Piper Jaffray on March 24, 2016, to $27.00 set by an analyst at Mizuho Securities USA Inc. on February 3, 2016. In the last three years, IMS traded as high as $33.52 on July 31, 2015, and most recently traded above the merger consideration – at $27.00 – on May 2, 2016.
On May 3, 2016, IMS reported strong earnings results for its first quarter 2016. Revenue for the quarter was $774 million, an increase of 22.5% compared to the same period last year. Operating income for the quarter was $113 million, an increase of 24.2% compared to the same period last year. Additionally, IMS has beat consensus analyst estimates for adjusted EPS and adjusted net income every quarter for the past two years, and has beat consensus analyst estimates for revenue in three out of the past four quarters. In commenting on these results, IMS Chairman and Chief Executive Officer Ari Bousbib remarked, “We are pleased to report another quarter of consistent strong operating performance, with technology services revenue again growing double digits in our core IMS business. Continued investment and new contract wins during the quarter position us well to continue this momentum.”
In light of these facts, Robbins Arroyo LLP is examining IMS’s board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
IMS shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information. IMS shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.