VNU to Buy IMS Health

NEW YORK Dutch company VNU NV said Monday it has reached an agreement to acquire IMS Health, a U.S.-based healthcare data provider, for 5.8 billion euros (around $7 billion) in cash and stock.The merger, expected to close in the first quarter of next year, will join the leading company in TV market research—VNU is the owner of brands like Nielsen Media Research and AC Nielsen, and is also the parent company of Adweek—with the best-known drug market data firm in the U.S.VNU, based in Haarlem, the Netherlands, will offer IMS shareholders $11.25 (9.38 euros) per share in cash and 0.6 share of VNU stock, a 16 percent premium to IMS' average share price over the past 30 days.As part of the deal, VNU said it would buy back up to 500 million euros ($600 million) worth of its own shares and borrow 2.5 billion euros ($3 billion) from several financial institutions to complete the transaction.VNU will also take on $300 million in IMS debt, according to a published report. In addition, the deal comes with a $3 billion "bridge facility" from three different banks "for incremental cash funding to complete the transaction," the statement said."It's a perfect fit," VNU Chairman and CEO Rob van den Bergh told an investors' conference in London this morning. "[Our] management teams have already worked together...building on geographic reach and global skills to serve international clients." Van den Bergh described the new entity as "an almost pure-play global marketing info company." Van den Bergh will remain chairman and CEO of the combined firm.IMS chief David Carlucci will take on the title of deputy CEO and COO. Carlucci framed the deal as one in which pharma clients could have access to a far broader swath of marketing information from a single source. The merger will create "the one company that can dramatically enhance value to clients through the value of the combination. We can address new audiences and new markets due to these capabilities," he said.VNU said the merger would realize about $130 million in "synergies" by 2008. Before that occurs, however, the media company will spend $180 million "to capture those synergies," according to a statement. In addition, VNU plans to buy back $500 million of its own stock.Neither company was immediately specific about office closings or job losses. "We have not identified any offices to close at this time," the companies said in a FAQ response for their employees. "However, in cities where both VNU and IMS have a presence, there may be an opportunity to consolidate or co-locate facilities. We will review these opportunities as part of our integration planning effort."IMS, based in Fairfield, Conn., sells clients information on how their products are used, and therefore matches the profile of other VNU units. The company earned $30.3 million on $411 million in sales in the first quarter, up 11 percent from a year earlier.VNU said the purchase would boost its cash earnings per share in the first year and annual earnings before interest, taxes and depreciation.

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VNU to Buy IMS Health

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