IMS Returns to Its Senses

As previously noted in the Buysider, the proposed reverse merger of IMS Health (RX Quote) into TriZetto (TZIX Quote) was a strong contender for the most ill-conceived corporate finance proposal in any century, and had as much chance of getting shareholder approval as this columnist has of fitting into his tuxedo by a Memorial Day wedding. It also provided a nice little opportunity to make some easy money.

Tuesday, reality was rediscovered by both management teams and the deal was pulled. In its place was an agreement for IMS to sell its Erisco division to TriZetto for around $255 million in stock. IMS also committed to enter a business contract for TriZetto's HealthWeb (SM) product and technology services.

Extracting from the press release, Victoria R. Fash, president and CEO of IMS Health said: "This new approach retains the strategic benefits of the original transaction in a simpler form designed to be more attractive to shareholders. We are committed to the IMS Health business strategy, facilitated by our new partnership with TriZetto.'' In other words, DUH! I can't really say this is a major victory for shareholders, since the end of the silliness simply replaces the value lost since the original deal was announced, unless you have been backing up the truck over the past few weeks. (Congratulations! Now re-up your TSC subscription!) ...