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Summary

  • IMS is a global information and technology services firm, providing healthcare information to various healthcare organizations.
  • IMS plans to raise $1.27 billion in its upcoming IPO, offering 65.0 million shares, including 20% insider shares, at an expected price range of $18-$21 per share.
  • We rate IMS a buy—being an industry leader, with an impressive leadership team.

IMS Health Holdings Inc (NYSE:IMS), a global information and technology services firm, providing healthcare information to various healthcare organizations, plans to raise $1.27 billion in its upcoming IPO.

The Danbury, Connecticut-based firm will offer 65.0 million shares, including 20% insider shares, at an expected price range of $18-$21 per share. If the IPO can reach the midpoint of that range at $19.50 per share, IMS will command a market value of $6.7 billion.

IMS filed on January 2, 2014.

Lead Underwriters: Goldman Sachs & Co, JP Morgan Securities LLC, Morgan Stanley & Co LLC

Underwriters: Barclays Capital Inc, BofA Merrill Lynch, Deutsche Bank Securities Inc, Drexel Hamilton LLC, HSBC Securities Inc, Leerink Partners LLC, Mizuho Securities USA Inc, Piper Jaffray & Co, RBC Capital Markets LLC, Stifel Nicolaus & Company Incorporated, Suntrust Robinson Humphrey Inc, TPG Capital BD LLC, Wells Fargo Securities LLC, William Blair and Co LLC

Overview of IMS

IMS provides its healthcare industry clients with its comprehensive collection of healthcare information to help them measure and improve their performance. The firm's collection includes sales, prescription, and promotional data, along with medical claims and patient records. IMS clients include life science companies, healthcare providers and payers, government agencies, scientists, and many others. IMS has been able to establish long-standing relationships with many of these organizations, having served its top 25 clients for over 25 years on average. The firm has a significant international position with a presence in over 100 countries; the firm generated 63% of its 2013 revenue outside of the US.

Valuation

IMS offers the following figures in its S-1 balance sheet for the year ended December 31, 2013:

Revenue: $2,544,000.000.00

Net Income: $82,000,000.00

Total Assets: $7,999,000,000.00

Total Liabilities: $7,116,000,000.00

Stockholders' Equity: $883,000,000.00

Few Strong Competitors

Though IMS is alone in the comprehensiveness and geographical reach of its services, it does face competition from government agencies, along with private firms offering information and analytics services. These competitors include IBM (NYSE:IBM), Infosys (NYSE:INFY), Accenture (NYSE:ACN), Kantar Health, Covance (NYSE:CVD), Trizetto, and many more.

Experienced Leadership

CEO and Chairman Ari Bousbib has served in his current positions since 2010. He previously worked in various roles with United Technologies Corporation, including President of UTC's Commercial Companies. He also served as the President and COO of Otis Elevator Company and as a partner at Booz Allen Hamilton. Mr. Bousbib sits on the board of directors of The Home Depot Inc (NYSE:HD). He holds a Master of Science Degree in Mathematics and Mechanical Engineering from the Ecole Superieure des Travaux Publics in Paris along with an MBA from Columbia University.

Investors Should Consider IMS a "Healthy" IPO

We rate this IPO a buy.

IMS is an established force in healthcare information, and its lengthy relationships with its best customers should provide the foundation for future success.

The firm is making money and, though it faces competition, will not likely see a competitor on equal footing in terms of available data in the near future.

We expect IMS's impressive leadership team to continue to push the firm to ever greater heights.

Source: IMS Health Holdings IPO Could Boost Shareholder Vitality