IMS Health: $4 Billion Deal Back from Dead?

NORWALK, CT. (TheStreet) -- If IMS Health(RX) had a grim prognosis last week, then Dr. Market has engineered a speedy recovery.

Last Friday, when news broke about a congressional amendment that would restrict the sale of patient prescription records to drug companies by doctors, shares of IMS Health went into freefall. The company derives a portion of its profit from these kinds of data sales.

The market reacted with panic Friday morning, with IMS Health shares plunging below $18.

Still worse, IMS Health is in the midst of a buyout. TCG Capital and the CPP Investment Board, a Canadian institutional investor, are planning to take IMS private for $4 billion in a leveraged buyout worth $22 per share -- a 31% premium to IMS shares' closing price just prior to the offer. Including assumed debt, the deal is valued at $5.2 billion.

Fears grew intense last week that the buyers might pull out of the deal -- or, at least, demand a lower price.

But, on Wednesday, the company announced that it has scheduled a shareholder vote on the planned acquisition for Feb. 8. This might seem par for the course in a run-up to closing an acquisition, but given last week's panic, news of the vote appeared to ease concerns that the congressional amendment might severely damage IMS's business or imperil the deal.

"It's a good sign," said John Kreger, an analyst with William Blair, adding, "We interpret it as a signal that everything is on track, and the amendment hasn't had an impact on the process."