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CRM, master-data and related businesses will be purchased for $520 million
IMS Health, which has been fairly active over the past year in acquisitions, leading to its IPO in April, has announced the acquisition of parts of Cegedim, the Paris-based IT and healthcare-data company. "Cegedim's complementary offerings will accelerate the build-out of our strategic roadmap in information and technology services," said Ari Bousbib, chairman and CEO of IMS. "The global combination of product, technology, infrastructure and people capabilities will bring compelling, integrated solutions to our clients and allow for greater operational efficiency." The $520-million deal is expected to close in early 2015.
Bousbib focused on two assets in explaining the deal to financial analysts: the OneKey database of healthcare-provider demographic and affiliation data (which Bousbib says is up to 40 million records globally and represents the “gold standard” in HCP master data), and the Mobile Intelligence CRM platform for phama field sales and related marketing activities, running in the cloud. Together, these businesses are growing in the single-digit range; a third part of the acquisition—premises-based legacy CRM and consulting and market research activities—has been declining at a double-digit rate. The combination of slowly-growing, and shrinking, businesses is what led to the relatively low ratio of the purchase price to revenue, about .90. (2013 revenue for the units is estimated at $573 million.)
The Cegedim assets will bring roughly 4,500 employees (in the US, India and elsewhere) to IMS Health; Bousbib says that synergies of roughly $50 million will be achieved within three years. The new assets will be incorporated into IMS Health’s IMS One private cloud, as well as the Nexxus commercial applications suite, but for the time being, IMS Health will support both Mobile Intelligence and its own Vantage 360 CRM systems. Bousbib says that the company has an advantageous position, with its private cloud, against other CRM and services vendors who have what he characterizes as “horizontal [i.e., any type of client, and not just life sciences], public cloud platforms.”