Tuesday, October 25, 2005

VNU/ACNielsen and IMS Breaking Up Before the Marriage?

In early July, the big news that VNU was acquiring IMS for $7 billion in a friendly transaction was announced. A new management structure for the combined company and significant planning activities have been underway and have been chronicled in company presentations and SEC documents. However, over the past month, news that some large institutional shareholders oppose the deal has been covered in the press. Today's Wall St. Journal article ($premium) reports that a consortium of private equity firms is waiting in the wings to make a bid for VNU once the deal is called off. Given all these reports of shareholder dissent, it is looking less and less likely that VNU's plans to merge its ACNielsen market research unit with IMS will occur.

The WSJ article states that the consortium wants to buy VNU in one piece--presumably to later break it up and sell the pieces for a price where the sum of the parts is greater than the whole. But where does that leave IMS? With all the media attention on this pharmaceutical market research firm, it is likely that there will be a range of suitors, including strategic buyers such as Thomson and Reed Elsevier who have considered a bid for IMS in the past, as well as some newcomers that are positioned for growth in the healthcare segment, such as Steve Case's Revolution Health Care or newly-IPO'd WebMD. Last but not least, expect interest from several private equity firms that have been active in the healthcare sector.
Post a Comment