Author Archives: Scalper1

Quintiles, IMS Health Merger To Forge Drug Industry Data Giant

IMS Health Holdings ( IMS ) will merge with Quintiles Transnational Holdings ( Q ) in an all-stock transaction with an equity value of about $9 billion, bringing together two of the biggest providers of data about the pharmaceutical industry. IMS Health shareholders will receive 0.384 Quintiles common stock for each share of IMS. The combined business will have an enterprise value of more than $23 billion, the companies said, and IMS Health shareholders will own about 51.4 percent of the shares of the combined business, according to a statement Tuesday. The equity value is based on IMS’s 336 million shares outstanding. The combination, which the companies expect to complete in the second half, will create an expanded pool of information drugmakers can buy to improve their businesses. IMS Health tracks prescriptions, medical claims and electronic records and sells the data, while Quintiles offers a range of services focused on product development, including advice on clinical-trial design — a business called a contract research organization, or CRO. “We view today’s merger as an intriguing combination, combining a market leading CRO with a dominant data service/technology company,” Ross J. Muken, an Evercore ISI analyst, said in a note to investors, calling the transaction a “bold move” for Quintiles. The transaction initially valued IMS at $26.53 a share, below its closing price of $26.87 on Monday. The stock had gained 5.5 percent this year, while Quintiles was little changed. IMS fell 7.3% to 24.90 in morning trade on the stock market today as Quintiles slid 7.2% to 64.11. That would value the deal at $24.61 per IMS Health share. How healthy is Quintiles’ stock, and how does it compare to rivals? Find out at IBD Stock Checkup The deal will add to 2017 earnings excluding some items. The combined company, Quintiles IMS Holdings Inc., will maintain dual headquarters in Danbury, Connecticut, and Research Triangle Park, North Carolina. Ari Bousbib, chairman and chief executive officer of IMS Health, will become chairman and CEO of the merged business. Quintiles CEO Tom Pike will become vice chairman. The board will be comprised of six directors appointed by the Quintiles board and six directors appointed by the IMS Health board. Goldman, Sachs & Co. provided financial advice to IMS Health, whose legal adviser was Weil, Gotshal & Manges LLP. Morris, Nichols, Arsht & Tunnell LLP served as legal adviser to the independent committee of the IMS Health board of directors. Quintiles’ legal advisers are Bryan Cave LLP and Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, LLP, and its financial adviser is Barclays. Simpson Thacher & Bartlett LLP served as legal adviser to Quintiles’ independent directors.

Apple Chipmaker Integrated Device Tops Q4 Views On Record Sales

Integrated Device Technology ( IDTI ) stock rocketed early Tuesday after the Apple ( AAPL ) Watch and Samsung Galaxy supplier topped analysts’ fiscal Q4 and full-year estimates on record quarterly and wireless charging sales. Needham analyst Quinn Bolton reiterated a buy rating and upped his price target on Integrated Device stock to 27 from 26. Integrated Device’s fiscal Q4 included the completed acquisition of privately held ZMDI. For the quarter ended April 3, Integrated Device reported $189.4 million in sales and 36 cents earnings per share minus items, up a respective 20% and 24% vs. the year-earlier quarter. Wall Street had modeled $187.1 million and 33 cents. Three months ago, Integrated Device guided to $187 million in sales, plus or minus $5 million. Integrated Device wrapped up fiscal 2016 with $697 million in sales and $1.37 EPS ex items, crushing the consensus of 12 analysts polled by Thomson Reuters for $695.2 million and $1.34. Year over year, sales and EPS grew 22% and 49%, respectively. Current-quarter sales guidance for $191 million, plus or minus $5 million, met the consensus for $191.6 million and would be up 6% vs. the year-earlier quarter. Integrated Device stock was up nearly 7% in early trading in the stock market today , near 21. But shares are down 20% this year, hurt by a 27% plunge on Feb. 2 after the chipmaker’s fiscal Q4 sales guidance missed expectations. Wireless charging sales hit $19 million in Q4, CFO Brian White told analysts on the company’s earnings conference call late Monday. In that segment, Integrated Device supplies the Apple Watch and Samsung Galaxy. Consumer end-market sales, which include wireless charging sales, rose 53% quarter over quarter and represented 17% of total sales (about $32.2 million), CEO Greg Waters said on the call. That business benefited from a full quarter of ZMDI’s sensors. Automotive and industrial sales of $16 million exceeded views by $2 million, Bolton wrote in a research report. Communication and computing sales, however, declined by a respective 7% and 10% quarter over quarter. For fiscal Q1, communications and auto/industrial sales are expected to grow a respective 1% and 6% sequentially. Consumer and computing sales are modeled flat. Integrated Device trades at a steep discount, Bolton wrote. “IDT holds leading market segment share in products that accounted for 77% of fiscal 2016 revenue,” he wrote. “IDT’s revenue concentration in these four segments may be a reason IDTI trades at a discount to its peer group.”