IMS Health Holdings, Inc.

On May 12, 2015, existing shareholders of the Company (collectively, the “Selling Stockholders”) completed the sale of 57.97 million shares of the Company’s common stock at a public offering price of $27.50 per share, including 6.87 million shares that were offered and sold by the Selling Stockholders pursuant to the full exercise of the underwriter’s option to purchase additional shares. These transactions are collectively referred to as the “Secondary Offering.” The Company did not sell any stock in, or receive any proceeds from, the Secondary Offering. The Company incurred $1 million of expenses in the second quarter of 2015 related to the Secondary Offering, which were included in Selling and administrative expenses.  

Operating income in the Americas region increased 12.6% in the three months ended June 30, 2016 compared to the same quarter in the prior year. On a constant currency basis, operating income increased 13.2% in the second quarter of 2016 compared to the second quarter of 2015. The increase in constant currency operating income was a result of revenue growth, partially offset by higher operating expenses of $44 million, in part due to the AlphaImpactRx acquisition and continued investments in the region to drive revenue growth. Operating income in the Americas region decreased 14.8% in the six months ended June 30, 2016 compared to the same period in the prior year. On a constant currency basis, operating income decreased 13.5% in the first six months of 2016 compared to the first six months of 2015. The decrease in constant currency operating income was a result of higher operating expenses of $131 million, largely due to continued investments in the region to drive revenue growth and the Cegedim and AlphaImpactRx acquisitions, partially offset by revenue growth.

On May 16, 2016, a putative stockholder class action lawsuit (Chiu v. Bousbib et al., C.A. No. 12340-CB) was filed in the Court of Chancery of the State of Delaware against the members of the IMS Health board of directors. An amended complaint in the Chiu action was filed on June 29, 2016. In general, the complaint alleges that the members of the IMS Health board of directors breached their fiduciary duties to IMS Health stockholders by, among other things, approving the proposed transaction for inadequate consideration and pursuant to an unfair and conflicted process. The amended complaint further alleges that the Registration Statement on Form S-4 filed June 3, 2016 in connection with the proposed transaction is materially misleading. The plaintiff seeks, among other things, injunctive relief prohibiting consummation of the transaction, rescissionary damages in the event the proposed transaction is consummated, and an award of attorneys’ fees and expenses. On July 1, 2016, the plaintiff filed a motion for a preliminary injunction seeking to enjoin the defendants from consummating the proposed transaction. The defendants have not yet responded to the plaintiff’s motion. We believe plaintiff’s allegations are without merit, reject all claims raised by plaintiff and intend to vigorously defend this matter.

In addition to the risk factors set forth in Part I — Item 1A — “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (the “10-K”), investors should consider the following risk factors arising from our intention to combine with Quintiles Transnational Holdings Inc. (“Quintiles”) through a “merger of equals” business combination (the “merger”). On May 3, 2016, we entered into a definitive merger agreement (the “merger agreement”) with Quintiles. Pursuant to the terms of the merger agreement, we will be merged with and into Quintiles. Upon completion of the merger, the separate corporate existence of IMS Health will cease, and Quintiles will continue as the surviving corporation (the “Surviving Corporation”) in the merger. Following a stockholder vote by both companies, the merger is expected to close early in the fourth quarter of 2016, although we cannot assure you that the transaction will close during that time or at all. The risk factors below should be read in conjunction with the risk factors set forth in the 10-K and the other information contained in this report as our business, financial condition or results of operations could be adversely affected if any of these risks actually occur.

Many of the conditions to completion of the merger are not within our control, and we cannot predict when or if these conditions will be satisfied. If any of these conditions are not satisfied or waived prior to March 31, 2017, it is possible that the merger agreement may be terminated. Although we have agreed in the merger agreement to use reasonable best efforts, subject to certain limitations, to complete the merger in the most expeditious manner practicable, these and other conditions to completion of the merger may fail to be satisfied.