IMS Health Slated for Year's Second-Biggest IPO

While the initial public offering calendar has been jammed this year, it's mainly been small deals. Tonight, prescription-data provider IMS Health Holdings Inc. plans to bring a rare billion-dollar debut.

The Danbury, Conn.-based company and some of its existing investors — the Canada Pension Plan Investment Board and private-equity firms TPG Capital and Leonard Green & Partners LP — expect to sell 65 million shares for $18 to $21 apiece, according to a regulatory filing.

The deal would raise $1.37 billion at the high end of that range, marking the second-largest IPO in the U.S. this year.

IMS Health maintains healthcare databases used by pharmaceutical manufacturers, healthcare-plan providers, pharmacies and others. Since its acquisition by TPG and the Canadian pension plan in early 2010, it has made a number of acquisitions to build its consulting and software arm, which is growing faster than its legacy data business and drove the 4.1% increase in the company's total revenue last year.

"They have a very stable, large, profitable legacy business, and they're looking to cross-sell additional products and value-added services into their existing client base," said John Schroer, who oversees about $625 million in healthcare stocks as a portfolio manager at Allianz Global Investors.

The bull case for IMS rests on whether "the success they have had thus far is sustainable," he added. Mr. Schroer declined to say whether he plans to buy shares in the IPO.

There has been a flurry of corporate debuts since the start of 2014, on the heels of the most active year for such deals since the financial crisis. But large-company offerings like this one have been scant. Instead early-stage healthcare companies have dominated the calendar, many of them looking to raise a few hundred million, at most.

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During the first quarter, 71 companies completed their initial share listings in the U.S., just shy of the 73 that did so in the final three months of 2013. But the proceeds raised in the latest period's deals tumbled to $12.3 billion from $25.3 billion.

The largest IPO so far in 2014, that of auto lender Santander Consumer USA Holdings Inc., raised $2 billion in late January. Natural-gas driller Rice Energy Inc.'s debut the same day raised $1.05 billion.

IMS Health is set to open on the New York Stock Exchange Friday under the symbol "IMS." J.P. Morgan Chase & Co. is leading the deal with Goldman Sachs Group Inc. and Morgan Stanley.