Share Sale Could Value Prescription-Data Provider at $7 Billion
IMS, owned by private-equity firms TPG, Leonard Green & Partners LP and the Canada Pension Plan Investment Board, will soon start a road show to pitch investors on its shares, which are expected to begin trading within the next two weeks. The private-equity firms are aiming to raise around $1 billion in the sale, the people said. That would make it one of the largest IPOs in what is shaping up to be a banner year for such offerings.
IMS, which employs about 9,500 people in more than 100 countries, is expecting a per-share price of as much as $21, the people said.
The U.S. IPO market is off to its best start since 2007, with 60 IPOs pricing this year. Here, traders at the New York Stock Exchange wait for shares in Q2 Holdings, Inc. to begin trading March 20. Reuters
The number of shares the Danbury, Conn., company plans to sell couldn't be learned. But at a price of $21 a share, IMS would be worth around $7 billion, or more than $10 billion including debt, the people said.
Private-equity owners are rushing to take advantage of the IPO market and profit by selling shares of companies they bought several years ago. IMS went private in 2010 in a deal valued at about $4 billion. The buyers originally put in $2.8 billion. Since then, the company has borrowed money to pay its owners about $2 billion in dividends.
IMS plans to use most of the expected proceeds from the IPO to repay debt, according to the people and earlier regulatory filings associated with the sale.
Raising $1 billion would make IMS the third-largest U.S.-listed IPO of 2014, further fueling a blazing start to the year for companies going public. The U.S. IPO market is off to its best start since 2007, with 60 IPOs pricing this year and raising some $10 billion, according to Dealogic.
The changing health-care industry has been one of the biggest drivers. Just over half of U.S.-listed IPOs this year have been of health-care related companies, primarily biotechnology drug makers.
The best-performing technology IPO of the year is Castlight Health Inc., CSLT -6.56%which before a recent selloff had doubled in price since it went public in March. Its software monitors corporate health-care spending.
IMS provides data on prescriptions, medical claims and sales to health-care companies. The company posted an $82 million profit on $2.54 billion in sales in 2013.
Suitors have approached IMS's owners in recent months about a potential sale, one of the people said. But the owners have decided they could get a better value taking the company public and never seriously considered a sale, this person said.
Many private-equity-owned companies pursue a so-called dual-track process in which they seek buyers even while preparing for an IPO.
Source: http://online.wsj.com
By mike.spector@wsj.com and Telis Demos attelis.demos@wsj.com
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