SPIN-OFF OF IMS HEALTH’S STAKE IN GARTNERGROUP PROGRESSING AS PLANNED
GartnerGroup Files Proxy with SEC; Both Boards approve modified plan
WESTPORT and STAMFORD, CT, May 12, 1999 -- IMS HEALTH (NYSE: RX), the world’s leading provider of information solutions to the pharmaceutical and healthcare industries, and GartnerGroup, Inc. (NYSE: IT), the world’s leading authority on information technology, today jointly announced that a proxy statement for the previously announced spin-off has been filed with the SEC and that the spin-off is progressing as planned. Upon SEC approval, the proxy statement will be publicly available and distributed to GartnerGroup shareholders and a special shareholders’ meeting will be held.
IMS HEALTH owns approximately 47.6 million GartnerGroup shares. Prior to the spin-off, 40.7 million of these shares will be exchanged for new Class B Common Stock of GartnerGroup as part of a GartnerGroup recapitalization. The Class B Common Stock will be entitled to elect at least 80 percent of GartnerGroup’s Board of Directors, but will otherwise be substantially identical to existing Class A Common Stock. All Class B shares will be distributed to IMS HEALTH shareholders in a tax-free distribution upon approval of the spin-off.
Both Boards of Directors have agreed to amend the terms of the transaction to provide for an increased share repurchase by GartnerGroup, which has committed to repurchase 20 percent of its outstanding shares (the maximum amount allowed by IRS rules) following completion of the spin-off. GartnerGroup will conduct a Dutch Auction tender offer, currently planned for July 1999, for 15 percent of its outstanding shares. The remaining 5 percent of the shares will be repurchased in the open market. IMS HEALTH and GartnerGroup have also agreed to reallocate $175 million of the previously planned $300 million cash dividend to the share repurchase. This will result in a cash dividend of $125 million to GartnerGroup shareholders and ensure sufficient funding for the increased share repurchase.
As previously disclosed, IMS HEALTH is required by IRS regulations to monetize its remaining interest in GartnerGroup as quickly as feasible after spin-off, subject to certain restrictions agreed to by both companies. This includes 6.9 million shares and warrants for an additional 600,000 shares.
The transaction is subject to SEC clearance of the proxy statement, additional regulatory approvals and approval by the majority of non-IMS HEALTH shareholders of GartnerGroup voting at the shareholder meeting. The company has previously received IRS approval and is seeking confirmation from the IRS in light of the restructured transaction. The transaction has the positive support of major non-IMS HEALTH GartnerGroup shareholders.
As the world's leading authority on IT, GartnerGroup provides clients with a wide range of products and services in the areas of IT advisory services, measurement, research, decision support, analysis and consulting. Founded in 1979, with headquarters in Stamford, Conn., GartnerGroup is at the center of a global community serving Fortune 1000 companies from 80 locations worldwide. GartnerGroup's unique capabilities and resources help bring clarity to the direction of the world's hottest and most volatile industry. Additional information about the company is available at www.gartner.com.
IMS HEALTH is the world's leading provider of information solutions to the pharmaceutical and healthcare industries. With $1.2 billion in 1998 revenue, IMS HEALTH operates in more than 90 countries. IMS HEALTH is the largest pharmaceutical manufacturer information partner, with over 40 years' experience in the industry. Key products and services integral to customer day-to-day operations include: market research for prescription and over-the-counter pharmaceutical products; sales management information to optimize sales force productivity; technology enabled selling solutions for sales and marketing decision-making; and technology systems and information services that support managed care organizations. Additional information is available at http://www.imshealth.com.
This press release includes statements which may constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Although IMS HEALTH believes the expectations contained in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove correct. This information may involve risks and uncertainties that could cause actual results of IMS HEALTH to differ materially from the forward-looking statements. Factors which could cause or contribute to such differences include, but are not limited to (i) the risks associated with operating on a global basis, including fluctuations in the value of foreign currencies relative to the U.S. dollar, and the ability to successfully hedge such risks, (ii) the extent in which IMS HEALTH seeks growth through acquisitions, and the ability to identify and consummate acquisitions on satisfactory terms, (iii) the ability to develop new or advanced technologies and systems for its businesses on a cost-effective basis, (iv) regulatory and legislative initiatives, particularly in the area of medical privacy, (v) deterioration in economic conditions, particularly in the pharmaceutical, healthcare, information technology or other industries in which IMS HEALTH’s customers operate, and (vi) GartnerGroup’s stock price.
Certain statements contained herein, including statements regarding the development of the company's services, markets and future demand for the company's services and other statements regarding matters that are not historical facts, are forward-looking statements (as defined in the Private Securities Litigation Reform Act of 1995). Such forward-looking statements include risks and uncertainties; consequently, actual results may differ materially from those expressed or implied thereby. Factors that could cause actual results to differ materially include, but are not limited to, ability to attract and retain professional staff of research analysts upon whom the company is dependent, ability to effectively manage growth, the ability to achieve continued customer renewals and achieve new contract growth in light of potentially adverse economic conditions and competitive pressures, ability to integrate operations of possible acquisitions, ability to manage the company's strategic partnerships, rapid technological advances, substantial competition from existing competitors and potential new competitors, risks associated with intellectual property rights important to the company's products and services, additional risks associated with international operations including foreign currency fluctuations and other risks listed from time to time in the company's reports filed with the Securities and Exchange Commission. Forward-looking statements included herein speak only as of the date hereof and the company undertakes no obligation to revise or update such statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events or circumstances.
CONTACT:
Jennifer L. Schlueter
GartnerGroup
203.316.6537 		Michael Gury
IMS HEALTH
203.222.4230