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Summary

  • A leading global information and technology services company in the healthcare industry.
  • 20% of the IPO proceeds are going to shareholders.
  • Revenues up 4% to $2.5 billion for 2013 vs 2012.

Based in Danbury, CT, IMS Health Holdings (NYSE:IMS) scheduled a $1.268 billion IPO on the NYSE with a market capitalization of $6.5 billion at a price range midpoint of $19.50 for Friday, April 4, 2014.

The full IPO calendar is available at IPOpremium.

SEC Documents
Manager, Joint managers: J.P. Morgan, Goldman Sachs, Morgan Stanley, BofA Merrill Lynch, Barclays, Deutsche Bank Securities, Wells Fargo Securities

Co-Managers: TPG Capital, HSBC, SunTrust Robinson Humphrey, Mizuho Securities, RBC Capital Markets, Piper Jaffray, William Blair, Drexel Hamilton, Leerink Partners, Stifel

End of lockup (180 days): Wednesday, October 1, 2014

End of 40-day quiet period: Wednesday, May 14, 2014

Summary
IMS is a leading global information and technology services company providing clients in the healthcare industry with comprehensive solutions to measure and improve their performance.

20% of the IPO proceeds are going to shareholders.

Valuation
Glossary

Valuation Ratios

Mrkt

Price /

Price /

Price /

Price /

% offered

2013 yr, proforma earnings

Cap (MM)

Sls

Erngs

BkVlue

TanBV

in IPO

IMS Health Holdings

$6,474

2.5

37.2

3.8

-1.5

20%

Conclusion
The rating on IMS is positive.
The market likes profitable, large, well-established companies.

To put the conclusions and observations in context, the following is reorganized, edited and summarized from the full S-1 referenced above.

Business
IMS is a leading global information and technology services company providing clients in the healthcare industry with comprehensive solutions to measure and improve their performance.

Information services contributes 60% of revenue. Technology services contributes 40% of revenue.

Revenue
IMS's top 1,000 clients accounted for over 95% of total revenue in each of the last three fiscal years.

From 2011 to 2013, the retention rate for IMS's top 1,000 clients purchasing information offerings was over 98%.

35% of IMS's technology services revenue in each of the last three fiscal years was recurring in nature, primarily driven by subscription and license-based contracts.

IMS data

IMS has one of the largest and most comprehensive collections of healthcare information in the world, spanning sales, prescription and promotional data, medical claims, electronic medical records and social media.

IMS standardizes, organizes, structures and integrates this data by applying its sophisticated analytics and leveraging its global technology infrastructure to help its clients run their organizations more efficiently and make better decisions to improve their operational and financial performance.

International
IMS has a presence in over 100 countries and it generated 63% of its 2013 revenue from outside the United States.

IMS serves key healthcare organizations and decision makers around the world, spanning the breadth of life science companies, including pharmaceutical, biotechnology, consumer health and medical device manufacturers, as well as distributors, providers, payers, government agencies, policymakers, researchers and the financial community.

IMS's information and technology services offerings, which it has developed with significant investment over its 60-year history, are deeply integrated into its clients' workflow.

Leveraged buyout
On October 23, 2009, IMS was formed by investment entities affiliated with TPG Global, LLC, CPP Investment Board Private Holdings Inc. and Leonard Green & Partners, L.P. (collectively, the "Sponsors").

On February 26, 2010, IMS acquired 100% of the outstanding shares of IMS Health Incorporated ("IMS Health") through its wholly owned subsidiary Healthcare Technology Acquisition, Inc., which it refers to as the Merger.

IMS was formed for the purpose of consummating the Merger with IMS Health and had no operations from inception other than its investment in IMS Health and its subsidiaries and costs incurred associated with its formation and the Merger. The acquisition of IMS Health resulted in a new accounting basis.

Dividend Policy
No dividends are planned initially

Intellectual Property
IMS's intellectual property assets include: patents and patent applications related to its innovations, products and services; trademarks and trademark applications related to its brands, products and services; copyrights in software and databases; trade secrets relating to data processing, statistical methodologies, editing and bridging techniques, business rules and other aspects of its business; and other intellectual property rights and licenses of various kinds.

IMS is licensed to use certain technology and other intellectual property rights owned and controlled by others, and, similarly, other companies are licensed on a non-exclusive basis to use certain technology and other intellectual property rights owned and controlled by IMS.

Competition
IMS's offerings compete with various firms, including Accenture, Cognizant Technology Solutions, Covance, Deloitte, Evidera, GfK, Health Market Science, IBM, Infosys, inVentiv Health, Kantar Health, McKinsey, Nielsen, OptumInsight, Parexel, Press Ganey, Quintiles, RTI Health Solutions, Symphony Health Solutions, Synovate Healthcare, The Advisory Board, Trizetto, Verisk and ZS Associates.

IMS also competes with a broad range of new entrants and start-ups that are looking to bring new technologies and business models to healthcare information services and technology services.

5% stockholders
TPG Funds 62.2%
CPPIB-PHI 26.1%
Green Equity Investors V, L.P., Green Equity Investors Side V, L.P. and LGP Iceberg Co-invest, LLC 10.7%

Use of proceeds
IMS expects to net $963 million from its IPO. Proceeds are allocated as follows:

to fund the redemption of the 12.5% Senior Notes and Senior PIK Notes. IMS will also use the U.S. dollar equivalent of $500 million of borrowings under the New Term Loans, $173 million of borrowings under the revolving credit facility and approximately $400 million of cash on its balance sheet to

(i) fund the redemption of the 12.5% Senior Notes and Senior PIK Notes and pay related fees and expenses,

(ii) pay $27 million in the aggregate to holders of outstanding Phantom SARs,

(iii) pay a one-time fee to terminate its management services agreement with the Sponsors of $72 million and

(iv) pay fees and expenses related to financings.

Disclaimer: This IMS IPO report is based on a reading and analysis of IMS's S-1 filing, which can be found here, and a separate, independent analysis by IPOdesktop.com. There are no unattributed direct quotes in this article.

Source: IPO Preview: IMS Health Holdings