IMS HEALTH Becomes Pure-Play Provider of Healthcare Information
WESTPORT, Conn., Nov. 12 /PRNewswire/ -- IMS HEALTH (NYSE: RX), the
world's leading provider of information solutions to the pharmaceutical and
healthcare industries, today announced that its board of directors has
approved a plan to spin-off its equity ownership of GartnerGroup, Inc.
(NYSE: IT). The transaction, expected to be completed in the first half of
1999, is to be structured as a tax-free distribution of GartnerGroup stock to
IMS HEALTH shareholders.
"This is the final step in a strategic progression that began with the
spin-off of Cognizant from Dun & Bradstreet two years ago," said Robert E.
Weissman, IMS HEALTH chairman and CEO. "Once again, we are returning
significant value to our shareholders. These two operating businesses have
different target markets, operating characteristics and customer
requirements," said Mr. Weissman. "We believe the ability to focus on their
specific industries, and to deploy tailored strategies, will build value for
customers and shareholders."
Transaction Structure
IMS HEALTH owns approximately 47.6 million GartnerGroup shares. Prior to
the spin-off, 40.7 million of these shares will be exchanged for new Class B
Common Stock of GartnerGroup. The Class B Common Stock will be entitled to
elect at least 80 percent of GartnerGroup's board of directors, but will
otherwise be substantially identical to existing Class A Common Stock. The
exchange will be part of a GartnerGroup recapitalization and requires approval
by GartnerGroup's non-IMS HEALTH shareholders. Class B shares will be
distributed to IMS HEALTH shareholders in a tax-free distribution, subject to
a favorable ruling from the Internal Revenue Service with respect to the
distribution.
IMS HEALTH intends to monetize its remaining position in GartnerGroup
within one year of the spin-off, subject to certain restrictions. This
includes 6.9 million shares, and warrants for a further 600,000 shares.
Separately, GartnerGroup announced that, subject to approval by the
Internal Revenue Service in connection with the ruling referenced above, it
intends to declare a special one-time cash dividend of $300 million to its
shareholders of record immediately prior to the spin-off. The GartnerGroup
board of directors authorized a $300 million open-market share repurchase
program to begin after the spin-off and be completed within one year.
The transactions are subject to receipt of a favorable ruling from the
IRS, final approval by the IMS HEALTH and GartnerGroup boards of directors,
and approval by GartnerGroup's non-IMS HEALTH shareholders.
Financial Outlook
"Predictable, sustainable future revenue and earnings growth, based solely
on the renewable, consistent results of IMS HEALTH is the primary advantage of
this transaction," said Victoria R. Fash, IMS HEALTH president and COO. "We
are reaffirming IMS HEALTH's guidance for EPS growth of 21-to-24 percent for
1998 and 1999, based on the strong outlook for the core IMS business. To
deliver further value to IMS HEALTH shareholders, we plan to invest all
after-tax cash proceeds from the GartnerGroup transactions to repurchase IMS
HEALTH stock."
An IMS HEALTH conference call with analysts which will include a
discussion of the proposed GartnerGroup transactions has been scheduled today,
November 12, 1998, at 10 a.m. Eastern time. Discussion of the GartnerGroup
transactions is expected to begin at approximately 10:30 a.m. Callers from
the United States may dial 1-800-633-8942 to participate. Callers from
outside of the United States may dial 1-212-346-6552 to participate.
As the world's leading independent authority on information technology
(IT), GartnerGroup provides clients with a wide range of products and services
in the areas of IT advisory services, measurement, research, decision support,
analysis and consulting. Founded in 1979, with headquarters in Stamford,
Conn., GartnerGroup is at the center of a global community of more than
11,000 client organizations served by analysts in 80 locations worldwide.
GartnerGroup's unique capabilities and resources help bring clarity to the
direction of the world's hottest and most volatile industry.
IMS HEALTH is the world's leading provider of information solutions to the
pharmaceutical and healthcare industries. With more than $1 billion in 1997
revenue, IMS HEALTH operates in over 90 countries. IMS HEALTH is the largest
pharmaceutical manufacturer information partner, with over 40 years'
experience in the industry. Key products and services integral to customer
day-to-day operations include: market research for prescription and
over-the-counter pharmaceutical products; sales management information to
optimize sales force productivity; technology enabled selling solutions for
sales and marketing decision-making; and technology systems and information
services that support managed care organizations. Additional information is
available at http://www.imshealth.com.
This press release includes statements which may constitute
forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Although IMS HEALTH
believes the expectations contained in such forward-looking statements are
reasonable, it can give no assurance that such expectations will prove
correct. This information may involve risks and uncertainties that could
cause actual results of IMS HEALTH to differ materially from the forward-
looking statements. Factors which could cause or contribute to such
differences include, but are not limited to (i) the risks associated with
operating on a global basis, including fluctuations in the value of foreign
currencies relative to the U.S. dollar, and the ability to successfully hedge
such risks, (ii) the extent in which IMS HEALTH seeks growth through
acquisitions, and the ability to identify and consummate acquisitions on
satisfactory terms, (iii) the ability to develop new or advanced technologies
and systems for its businesses on a cost-effective basis, (iv) regulatory and
legislative initiatives, particularly in the area of medical privacy, and (v)
deterioration in economic conditions, particularly in the pharmaceutical,
healthcare, information technology or other industries in which IMS HEALTH's
customers operate.
SOURCE IMS Health
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Related links:
http://www.imshealth.com
Company News On-Call:
http://www.prnewswire.com/comp/115785.html or fax,
800-758-5804, ext. 115785
CONTACT:
Michael Gury of IMS HEALTH, 203-222-4230
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