IMS Health plans $1.25 billion in new debt with Quintiles merger

By Sara Rosenberg

New York, May 3 – IMS Health Holdings Inc. has received a commitment for up to $1.25 billion in senior secured incremental term loans in connection with its pending merger with Quintiles Transnational Holdings Inc., according to an 8-K filed with the Securities and Exchange Commission on Tuesday.

Goldman Sachs Bank USA and J.P. Morgan Securities LLC are the lead banks on the loans.

The debt consists of an up to $400 million incremental term loan A and an up to $850 million incremental term loan B.

However, IMS has the option to replace some or all of the incremental term debt commitment with a private placement or public offering of senior secured and/or unsecured notes, the filing said.

Any notes issuance would reduce the incremental term loans on a dollar-for-dollar basis.

Proceeds from the new debt will be used to refinance existing credit facility borrowings at Quintiles.

Combined gross leverage is 4 times and net leverage is 3.2 times 2015 adjusted EBITDA.

Under the merger agreement, IMS shareholders will receive a fixed exchange ratio of 0.384 of a share of Quintiles common stock for each share of IMS common stock. Upon closing, IMS shareholders will own about 51.4% of the shares of the combined company on a fully diluted basis, and Quintiles shareholders will own around 48.6% of the combined company on a fully diluted basis.

The merged company will be named Quintiles IMS Holdings Inc.

Closing is expected in the second half of this year, subject to regulatory approvals, approval by both IMS and Quintiles shareholders, and other customary conditions.

IMS is a Danbury, Conn.-based information and technology services company providing clients in the health care industry with end-to-end solutions to measure and improve their performance. Quintiles is a Durham, N.C.-based provider of product development and integrated health care services.

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