Cognizant Technology Solutions Corporation · NASDAQ:CTSH
Cognizant Technology Solutions — Merger or Acquisition (November 2002)
15 slides from Cognizant Technology Solutions's merger presentation, Nov 15, 2002
Slide 1: IMS Health Split-off of Cognizant
We urge you to read the documents that IMS Health and Cognizant have filed and will file in the future with the SEC in connection with the proposed Split-off. These documents contain important information about the proposed Split-off and its effect on the companies and their shareholders. These docu
Slide 2: Transaction Summary
Transaction Summary IMS Health ("IMS") has announced its intention to divest its investment in Cognizant Technology Solutions ("Cognizant") through a split-off transaction Split-off will provide IMS stockholders the opportunity to exchange their IMS shares for shares of Cognizant on a tax-free basis
Slide 3: Transaction Summary (cont.)
Transaction Summary (cont.) IMS currently owns 11.3 million shares of Cognizant, representing approximately 56% of Cognizant's outstanding shares Timing of exchange offer subject to SEC review Currently expect to launch exchange offer in January and close in February Cognizant is an important busine
Slide 4: Transaction Result - IMS
Transaction Result - IMS Enables IMS management to focus solely on core pharmaceutical business Divests non-strategic asset on a tax-efficient basis Intended to allow IMS to fully exit from Cognizant investment Likely to be neutral to accretive to 2003 EPS
Slide 5: Transaction Result - Cognizant
Transaction Result - Cognizant Cognizant will become a truly independent operating entity Cognizant's equity ownership is expected to be in the hands of the investing public Overhang that exists from the uncertain status of IMS plans for Cognizant will be eliminated The outstanding float of Cognizan
Slide 6: Targeted Split-Off Timetable
Targeted Split-Off Timetable Cognizant filed an S-4 on Thursday, November 14, 2002 IMS and Cognizant must complete the SEC review process Iterative process, expected to be completed by year end Once SEC requirements are satisfied, IMS will set the exchange ratio, the minimum tender amount and commen
Slide 7: IMS Ownership Stake in Cognizant
IMS Ownership Stake in Cognizant Cognizant has two classes of common stock Class A (8.9 million shares) has 1 vote per share Class B (11.3 million shares) has 10 votes per share Except for voting rights, Class A and Class B shares are identical in all respects IMS owns 100% of the Class B Common Sto
Slide 8: Split-Off Transaction Mechanics
Split-Off Transaction Mechanics Exchange ratio will be set immediately prior to launch of exchange offer Exchange ratio will be based on two variables: The closing price of IMS and Cognizant stock the day before the exchange ratio is set A premium on the IMS stock price designed to encourage IMS sha
Slide 9: Split-Off Transaction Mechanics: Alternatives for IMS Shareholders
Split-Off Transaction Mechanics Alternatives for IMS Shareholders IMS shareholders have the following options in response to the exchange offer Tender into the exchange offer all IMS shares held Tender into the exchange offer a portion of IMS shares held Do nothing and retain all existing IMS shares
Slide 10: Split-Off Transaction Mechanics: Exchange Offer Oversubscribed
Split-Off Transaction Mechanics Exchange Offer: Oversubscribed If the number of shares tendered exceeds the amount necessary to distribute all Class B shares, the following will occur: IMS will reduce the number of shares accepted for exchange on a pro rata basis ("proration") Excess shares will be
Slide 11: Split-Off Transaction Mechanics: Exchange Offer Undersubscribed
Split-Off Transaction Mechanics Exchange Offer: Undersubscribed If shares tendered are less than the amount necessary to distribute all Class B shares, IMS has the following options: IMS can accept the shares tendered and close out the transaction IMS can extend the exchange offer and/or modify its
Slide 12: Financial Implications for IMS
Financial Implications for IMS IMS annual 2002 financial results will be unaffected (other than IMS's share of CTS transaction related costs) In future periods (assuming 100% of CTS shares are exchanged): Cognizant's operating results (income statement) will no longer be consolidated into IMS Cogniz
Slide 13: Financial Implications for Cognizant
Financial Implications for Cognizant There is no material impact on Cognizant's financial statements Cognizant will incur $2-$3 million in transaction related costs and expenses The number of Cognizant shares outstanding will not change as a result of this transaction
Slide 14: Precedent Split-Off Transactions
Precedent Split-Off Transactions Last Five Years AT&T - AT&T Wireless (7/9/01) Sara Lee - Coach (4/4/01) GM - GM Hughes (5/19/00) DuPont - Conoco (8/6/99) Limited - Abercrombie & Fitch (5/13/98)
Slide 15: Safe Harbor
Safe Harbor This presentation 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 and Cognizant believe the expectations contained in such forward-looking statemen
Cognizant Technology Solutions — Merger or Acquisition (November 2002) on 6ix