LLR, Tailwind Exit SDI

By Ken MacFadyen - themiddlemarket.com - January 17, 2011

Sale to TPG Capital’s IMS Health comes as the Supreme Court considers constitutionality of state laws banning commercial use of prescription data.

TPG Capital-backed IMS Health agreed to acquire rival healthcare analytics provider SDI Health LLC through an undisclosed deal. The sale represents an exit for private equity firms Tailwind Capital and LLR Partners.

LLR had originally invested in SDI in 2008, when it backed the July acquisition of Quintiles and McKesson Corp. joint venture Verispan. Tailwind, in November 2009, acquired an undisclosed stake in SDI, investing alongside LLR. That same month, TPG Capital and the CPP Investment Board agreed to acquire IMS through a $5.2 billion deal.

Calls to SDI and IMS were not returned by press time.

The deal, based on the timing, would appear to mark a successful exit for LLR and Tailwind.

The transaction, coincidentally, was sealed in the same week the US Supreme Court said it would consider a case involving SDI and IMS regarding the constitutionality of state laws blocking the commercial use of prescription data. Vermont, in 2007, banned the sale and use of prescriber data, which companies like IMS, SDI and others, collect and then market to the pharmaceutical companies. The Supreme Court is expected to hear the case in April.

For LLR, the sale continues its recent run of realizations. The firm, in 2010, exited Welocalize, Inc., American Renal Associates, and recouped proceeds through a recapitalization of retailer Five Below.

Tailwind, meanwhile, earlier this month sold claims recovery services company Trover Solutions through  to Boston’s ABRY Partners, a deal that generated a roughly 5x return for the New York firm.