Quintiles (Q): Q completes merger with IMS - UBS
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UBS analyst, Jonathan Groberg, reiterated his Buy rating on shares of Quintiles (NYSE: Q) after Quintiles IMS Holdings (Q) announced on Monday that it has successfully completed its merger of equals transaction with IMS Health (IMS). As of Monday, shares of IMS are no longer traded.
With a combined ~$8bn in revs, the merger combines Q’s scientific expertise and IMS’s advanced information analytics to form a "smarter CRO" aimed at addressing its life science customers most pressing needs: 1) Better R&D efficiency; 2) Demand for real world evidence; and 3) Better technology and analytics. We think Q/IMS could, if properly executed, become a unique pharma partner with a significant competitive advantage.
Because each firm had different policies around amortization, stock compensation, and tax, there are likely to be many adjustments, we think it makes sense to focus on EV/EBITDA vs. P/E previously. The PT goes to $90 based on Q/IMS’s blended historic forward EV/EBITDA multiple average of 12.5x, applied to 2018 EBITDA estimate.
Shares of Quintiles closed at $78.79 yesterday.
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