Dun Agrees to Buy Health Care Database Firm : IMS to Get $1.7 Billion in Stock, Remain Separate
Business information giant Dun & Bradstreet Corp. said Sunday it has agreed to buy IMS International, a fast-growing health care and pharmaceuticals information firm, in exchange for about $1.77 billion in Dun & Bradstreet stock.
The agreement, which culminates almost a decade of informal discussions between the two companies, would give Dun & Bradstreet long-sought entry into the health care information business.
Well known in business circles, Dun & Bradstreet is already a major provider of financial, marketing and credit information. It owns such firms as Moody’s Investors Service and Nielsen Marketing Research.
New York-based IMS compiles and then sells such information as the sales of prescription drugs, studies on physician prescriptions and treatments, hospital purchases of pharmaceutical supplies and equipment. The company also publishes directories of pharmaceutical products, medical journals and newsletters.
Separate Company
IMS, which has seen both profits and sales grow by about 25% in recent years, reported income from continuing operations of $43.3 million on revenue of $411.5 million for the 12 months ending Sept. 30, 1987.
IMS Chairman Thomas J. Russell Jr. and President Robert Louis-Dreyfus would remain with the company “as long as necessary to make a transition,” said Dun & Bradstreet spokesman Robert S. Diamond. IMS and its 5,000 employees will work as a separate company, says Diamond. “It will not be part of a D&B; division.”
Under the agreement, IMS shareholders will each receive .801 newly issued shares of Dun & Bradstreet common stock--about 33.4 million shares in total--for each share of IMS stock.
The $1.77-billion price is based on Friday’s $53-a-share closing price for Dun & Bradstreet common stock. IMS’ stock closed at $30.625.
Stock options held by IMS executives may entitle them to an additional 3.5 million Dun & Bradstreet shares.
Dun & Bradstreet would also receive an option to purchase 6.26 million shares of IMS’s common stock--about 15% of the total outstanding shares--at $42.45 a share.
The agreement must be approved by shareholders of both companies.
