IMS Health's acquisition of SDI Health was officially consummated, and its parent company is moving forward to divest two SDI product lines, as per a settlement order proposed by federal regulators to preserve competition.
The Federal Trade Commission (FTC) put forth the settlement and must approve any buyer. As IMS parent Healthcare Technology Holdings moves forward with its acquisition of SDI through IMS, it must sell the two businesses to a buyer within three months of the completion of the deal, or the FTC may appoint a trustee to sell the assets (the holding company can also ask for an extension).
One of those two product lines, SDI's medical audit business, is part of a two-player market, with IMS controlling 53% and SDI holding a 47% stake. The other product line, the promotional audits business, is also dominated by the two firms—SDI has 68% of the market, and IMS holds a 30% share (Cegedim controls 2%).
Terms of the sale, which IMS announced in January, were not disclosed. “We are excited to have successfully completed our purchase of SDI Health,” said IMS spokesman Gary Gatyas, Jr. “Together, the newly combined company is well positioned to support the needs of our clients.”
On the same day it announced the settlement, the FTC filed a complaint alleging “that the proposed acquisition would substantially increase IMS's share in [the two audit markets],” and eliminate its only significant competitor. The settlement is designed to soothe the regulator's concerns.