Cognizant Corporation Spin-off Strengthens its Leadership
In the Health Information Industry
WESTPORT, Conn., March 23 /PRNewswire/ -- Cognizant Corporation
(NYSE: CZT), Walsh International Inc. (Nasdaq: WSHI) and Pharmaceutical
Marketing Services Inc. (Nasdaq: PMRX) today announced the signing of
definitive agreements for IMS HEALTH to acquire Walsh and PMSI. IMS HEALTH is
the premier global provider of information solutions to the pharmaceutical and
healthcare industries, with more than $1 billion in 1997 revenue.
"The acquisition of Walsh and PMSI consolidates IMS HEALTH's leadership
position in our core markets," said Robert E. Weissman, Cognizant chairman and
chief executive officer. "Customer value is enhanced by offering broader
global coverage, an expanded product and service portfolio, and accelerated
investments in innovative new products. Financially, these transactions are
accretive near-term beginning in 1999, adding growth businesses which result
in improved shareholder value."
Under terms of the agreements, Walsh shareholders will receive
.3041 shares of Cognizant common stock per Walsh share, or a consideration of
$167 million, and PMSI shareholders will receive .2800 shares of Cognizant
common stock per PMSI share, or a consideration of $180 million. The number
of Cognizant shares received is subject to a collar adjustment based on the
price of Cognizant shares during a period prior to the closing of the
transactions. Walsh currently has approximately 10.6 million shares
outstanding; PMSI shares outstanding total approximately 12.4 million.
The transactions have been independently authorized by the Cognizant,
Walsh and PMSI boards of directors, and are subject to approval by Walsh and
PMSI shareholders. The acquisitions will be accounted for under purchase
accounting and are projected to close in the second quarter of 1998, subject
to regulatory approval. Both transactions are expected to be tax-free. A
one-time, non-cash charge to write off in-process research and development is
expected, in the range of $110 to $125 million for both acquisitions combined.
Walsh International, based in Newtown, PA, generated revenue of
$54 million in its fiscal year ended June 30, 1997, and employs approximately
500 professionals in 14 countries. Walsh, established in 1988, develops and
markets leading-edge sales force automation systems for pharmaceutical
companies. The company's integrated technology, data and services are used by
540 pharmaceutical sales forces in 85 healthcare companies in over
30 countries around the world. Precise(TM) and Premiere(TM), two of Walsh's
leading electronic territory management systems (ETMS) products, today support
over 14,000 users.
New York-based PMSI had ongoing information services revenue of
$62 million for its fiscal year ended June 30, 1997, and employs approximately
500 professionals in nine countries. PMSI was established in 1991 and
provides a range of information services to pharmaceutical and healthcare
companies in the U.S., Europe and Japan.
On Dec. 15, 1997, PMSI completed the acquisition of Source Europe, a
business delivering prescription database services in five European countries.
Scott-Levin, PMSI's U.S. subsidiary, provides market research and managed care
audits, as well as strategic consulting, to pharmaceutical companies in the
U.S. PMSI is the international leader in physician profiling database
services, with its Scriptrac(TM) service offered in Europe and Japan.
"IMS HEALTH is committed to building customer value," said Victoria R.
Fash, IMS HEALTH president and chief operating officer. "Walsh and PMSI
together complete a global product portfolio of IMS sales and marketing
services. We plan to accelerate investment in innovative new business
solutions, including physician micro-marketing, and the integration of ETMS
mobile technology with IMS databases. By offering full-spectrum global
solutions, IMS HEALTH enables improved efficiency and effectiveness, designed
to increase productivity for our pharmaceutical customers worldwide," said
Ms. Fash.
In Europe, IMS HEALTH plans to accelerate its prescription database launch
significantly by combining the IMS Xtrend(TM) and PMSI's Source(TM)
micro-marketer initiatives. Walsh's Pharbase(TM) data and PMSI's physician
profiles enable enhanced physician targeting services. Scott-Levin will
strengthen IMS HEALTH's market research business in the U.S. by adding new
capabilities in market research audits, managed care services and consulting
services.
The combination of IMS HEALTH's Sales Technologies, which is focused
primarily in the U.S., and Walsh, concentrated in Europe and Asia Pacific,
instantly creates the global leader in ETMS for pharmaceutical companies
worldwide. Combined, Sales Technologies and Walsh support over 35,000 users.
"Financially, these acquisitions are sound investments," said Ms. Fash.
"Both are projected to be earnings neutral in 1998, becoming accretive in
1999. Cost synergies in known areas, such as duplicate data supply contracts,
are the key assumption driving 1999 accretion. Walsh International and Scott-
Levin offer attractive revenue growth rates, anticipated in the mid-teens
range near-term. While we believe long-term revenue upside exists,
incremental revenue synergy has not been incorporated in the projections,
based on a conservative financial approach."
IMS HEALTH is the world's leading provider of information solutions to the
pharmaceutical and healthcare industries. Pharmaceutical sales, prescription
and market data and analysis are offered, along with decision support systems
that facilitate the advancement of world health. IMS HEALTH operates in more
than 90 countries, and its businesses include: IMS, the leading global
provider of sales management and market research information to pharmaceutical
companies; Erisco, a provider of software-based administrative and analytical
solutions to the healthcare industry; Cognizant Technology Solutions, an
outsourcer of software applications and development services; and Enterprises,
the company's venture capital unit, focused on investments in emerging
healthcare businesses. IMS HEALTH is also the largest shareholder of
GartnerGroup (Nasdaq: GART), the premier provider of research and advisory
services to the information technology industry.
IMS HEALTH is currently a unit of Cognizant Corporation (NYSE: CZT). On
Jan. 15, 1998, Cognizant announced plans to become two independent public
companies by mid-1998: IMS HEALTH and Nielsen Media Research. Additional
information is available at Cognizant's Website: http://www.cognizantcorp.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 Cognizant 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 Cognizant, IMS HEALTH, Walsh International or PMSI 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 ability to develop new or advanced
technologies and systems for their businesses on a cost-effective basis,
(iii) the ability to successfully achieve estimated effective tax rates and
corporate overhead levels, (iv) regulatory and legislative initiatives,
particularly in the area of medical privacy, (v) deterioration in economic
conditions, particularly in the pharmaceutical, healthcare, information
technology or other industries in which their customers operate,
(vi) conditions in the securities markets which may affect the value or
liquidity of portfolio investments, and (vii) other factors detailed in
Cognizant's SEC filings.
SOURCE Cognizant Corporation
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Related links:
http://www.cognizantcorp.com
CONTACT:
Joseph C. Allen of Cognizant Corporation,
203-222-4235
CNOC: http://www.prnewswire.com or fax, 800-758-5804, ext.
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