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IMS Health in sale talks

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October 20, 2009 – Comments (0) | RELATED TICKERS: RX.DL

IMS Health (RX) is in sale talks with several private equity firms, as reported by the Wall Street Journal. The offer price seems to be in the $17 range. That's considerably below where I recommended the stock (around $23, where I thought it was a good deal) but considerably above where I actually bought it ($12 and change - thought it was a great deal). 

IMS isn't in a particularly cyclical business. Its database of pharma sales info would be impossible to replicate. The firm provides a very valuable service to pharma companies. I certainly imagine the company is attractive to the private equity folks. In retrospect, I wouldn't have paid $23, given the decline in demand for IMS' solutions. I do expect that to be a short-term problem, though. I also believe that the offer reportedly on the table undervalues the firm. 

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