IQVIA Acquires Remaining Interest in Q2 Solutions from Quest Diagnostics; Raises Full Year 2021 Adjusted Diluted EPS Guidance

Rhea-AI Summary

IQVIA Holdings Inc. (NYSE:IQV) has completed the acquisition of Quest Diagnostics' 40% minority share in Q² Solutions for $760 million. This acquisition provides IQVIA full ownership, enhancing its capabilities in clinical laboratory services. The transaction is cash-funded, maintaining IQVIA's target net leverage ratio. The acquisition is expected to be accretive to IQVIA's Adjusted Diluted EPS, with revised guidance for 2021 set between $7.89 and $8.20. This move strengthens IQVIA's market position and service offerings while ensuring Quest remains a key laboratory partner.

Positive

• IQVIA now owns 100% of Q² Solutions, enhancing its service portfolio.
• Expected to be $0.12 accretive to 2021 and at least $0.18 to 2022 Adjusted Diluted EPS.
• Revised 2021 Adjusted Diluted EPS guidance increased to $7.89 - $8.20.

Negative

• None.

IQVIA Holdings Inc. (“IQVIA”) (NYSE:IQV), a leading global provider of advanced analytics, technology solutions, and clinical research services to the life sciences industry, today announced the acquisition of the 40 percent minority share of Q² Solutions from Quest Diagnostics (NYSE: DGX), the world leader in diagnostic information services, for $760 million, resulting in 100 percent ownership by IQVIA. The transaction has been financed through cash on hand and is not expected to impact IQVIA’s target net leverage ratio.

Q² Solutions is a leading global clinical laboratory services organization that provides comprehensive testing, project management, supply chain, biorepository and biospecimen and consent tracking solutions for clinical trials. Established as a joint venture in 2015, IQVIA previously owned a 60 percent majority share and Quest Diagnostics owned a 40 percent minority share.

Quest will remain the strategic preferred laboratory provider for Q² Solutions clients under a multi-year agreement to provide a range of complementary lab testing capabilities to augment Q² Solutions’ core offerings, extending its industry leading suite of services.

The transaction is expected to be approximately $0.12 accretive to IQVIA’s 2021 Adjusted Diluted EPS and at least $0.18 accretive to 2022 Adjusted Diluted EPS. As a result, IQVIA is raising its full-year 2021 Adjusted Diluted EPS guidance as follows:

($)			Updated	Prior(1)
Adjusted Diluted EPS			$7.89 - $8.20	$7.77 - $8.08
Growth (VPY%)			22.9% - 27.7%	21.0% - 25.9%
(1) Provided on Q4 2020 earnings call on February 10, 2021

As IQVIA previously owned the majority share of the joint venture, it has consolidated 100 percent of Q² Solutions’ revenue and Adjusted EBITDA into its reported financial statements. As a result, the acquisition of Quest's 40 percent interest will not impact IQVIA’s revenue and Adjusted EBITDA.

About IQVIA

IQVIA (NYSE:IQV) is a leading global provider of advanced analytics, technology solutions, and clinical research services to the life sciences industry. IQVIA creates intelligent connections across all aspects of healthcare through its analytics, transformative technology, big data resources and extensive domain expertise. IQVIA Connected Intelligence™ delivers powerful insights with speed and agility — enabling customers to accelerate the clinical development and commercialization of innovative medical treatments that improve healthcare outcomes for patients. With approximately 70,000 employees, IQVIA conducts operations in more than 100 countries.

IQVIA is a global leader in protecting individual patient privacy. The company uses a wide variety of privacy-enhancing technologies and safeguards to protect individual privacy while generating and analysing information on a scale that helps healthcare stakeholders identify disease patterns and correlate with the precise treatment path and therapy needed for better outcomes. IQVIA’s insights and execution capabilities help biotech, medical device and pharmaceutical companies, medical researchers, government agencies, payers and other healthcare stakeholders tap into a deeper understanding of diseases, human behaviour and scientific advances, in an effort to advance their path toward cures. To learn more, visit www.iqvia.com.

Cautionary Statements Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, without limitation, our full-year 2021 Adjusted Diluted EPS guidance, 2022 Adjusted Diluted EPS guidance and Net Leverage Ratio. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as “expect,” “assume,” “anticipate,” “intend,” “plan,” “forecast,” “believe,” “seek,” “see,” “will,” “would,” “target,” similar expressions, and variations or negatives of these words. Actual results may differ materially from our expectations due to a number of factors, including, but not limited to, the following: business disruptions caused by natural disasters, pandemics such as the COVID-19 (coronavirus) outbreak and the public health policy responses to the outbreak, international conflicts or other disruptions outside of our control; our ability to accurately model or forecast the impact of the spread and/or containment of COVID-19, among other sources of business interruption, on our operations and financial results; most of our contracts may be terminated on short notice, and we may lose or experience delays with large client contracts or be unable to enter into new contracts; the market for our services may not grow as we expect; we may be unable to successfully develop and market new services or enter new markets; imposition of restrictions on our use of data by data suppliers or their refusal to license data to us; any failure by us to comply with contractual, regulatory or ethical requirements under our contracts, including current or changes to data protection and privacy laws; breaches or misuse of our or our outsourcing partners’ security or communications systems; failure to meet our productivity or business transformation objectives; failure to successfully invest in growth opportunities; our ability to protect our intellectual property rights and our susceptibility to claims by others that we are infringing on their intellectual property rights; the expiration or inability to acquire third party licenses for technology or intellectual property; any failure by us to accurately and timely price and formulate cost estimates for contracts, or to document change orders; hardware and software failures, delays in the operation of our computer and communicatio

FAQ

What is the impact of IQVIA acquiring Q² Solutions on its financial performance?

The acquisition is expected to be accretive to IQVIA's Adjusted Diluted EPS by $0.12 in 2021 and at least $0.18 in 2022, enhancing its financial performance.

How much did IQVIA pay for the acquisition of Q² Solutions?

IQVIA paid $760 million to acquire the 40% minority share of Q² Solutions from Quest Diagnostics.

What are the revised EPS guidance figures for IQVIA after the acquisition?

IQVIA's revised full-year 2021 Adjusted Diluted EPS guidance is now set at $7.89 - $8.20.

Will Quest Diagnostics continue to be involved with Q² Solutions after the acquisition?

Yes, Quest will remain the strategic preferred laboratory provider for Q² Solutions under a multi-year agreement.

How was the acquisition of Q² Solutions financed?

The acquisition was financed through cash on hand, and it is not expected to impact IQVIA's target net leverage ratio.