Quintiles and IMS Health Announce Merger to Form Quintiles IMS Holdings, Inc.

On May 3, IMS Health, a global leader in strategic consulting services for the pharmaceutical and healthcare industries, and Quintiles, the world’s largest contract research organization (CRO), announced that their boards of directors had decided to complete a merger through an equity transaction. The merged company will be renamed Quintiles IMS Holdings, Inc., with a market capitalization exceeding $23 billion.

Under the terms of the merger, IMS Health shareholders will exchange their shares for Quintiles shares at a fixed ratio of 0.384 Quintiles shares per IMS Health share. Upon completion of the merger, Quintiles shareholders will own approximately 48.6% of the new company, with the remaining 51.4% held by IMS Health shareholders.

Last October, Quintiles and IMS Health announced a global partnership. With everything proceeding smoothly, the two companies are now undergoing a full merger. The newly formed joint entity, QuintilesIMS Holdings, will maintain dual headquarters. Arie Bousbib of IMS Health will serve as Chairman and CEO of the merged company, while Tom Pike, CEO of Quintiles, will become Vice Chairman. The board of directors will consist of 12 members, with six appointed by Quintiles and the other six by IMS Health.

Goldman Sachs provided financial advice to Aimei Shi, while Weil, Gotshal & Manges LLP served as legal counsel to Aimei Shi.

“Investors may approach this transaction with caution, as neither party is receiving a merger-related premium, and the merger of equals also heightens integration risks,” said John Kreger, an analyst at global investment management firm William Blair, in a research report.

The transaction values i3 at $26.53 per share, below its Monday closing price of $26.87. On the New York stock market on Monday, its share price fell as much as 7.4% to $24.87 by 10:50 a.m. Quintiles’ stock also dropped 7.6% to $63.86, closing the day at $69.10. Given Monday’s market performance, the deal did not offer a premium to either company, as both stocks declined.

Stock Performance of IMS Health and Quintiles Over the Past Year:

Data source: Bloomberg

IQVIA’s primary clients are pharmaceutical companies, for whom R&D costs and efficiency are critical constraints on growth. This acquisition expands the information resources available to these companies; in addition to outsourcing services, they now have access to specialized information and strategic consulting services.