UPDATE 3-IMS agrees to $4 bln deal, biggest LBO this year

* Values IMS at $22 a share

* 31 pct premium from Wednesday's price

* Including debt values company at $5.2 billion

* Shares soar 23 percent by close of trading
(Adds comments from Canada Pension Plan interview, adds
Toronto to dateline)

By Megan Davies and Pav Jordan

NEW YORK/TORONTO, Nov 5 (Reuters) - Private equity firm TPG
[TPG.UL] and the Canada Pension Plan struck on Thursday the
biggest leveraged buyout deal of this year, worth $4 billion,
to buy prescription drug sales data provider IMS Health Inc
(RX.N).

The deal shows how much the financing markets and general
optimism have improved. Private equity firms were shut off from
striking traditional LBOs after the credit crisis limited
access to cheap debt, but in the past few months, deal flow has
been picking up again.

Excluding debt, the $22-a-share cash deal is the biggest
leveraged buyout since Bristol-Myers Squibb Co (BMY.N) sold its
ConvaTec unit to Avista Capital and Nordic Capital in August
2008 for $4.1 billion, according to data from Thomson Reuters.

The deal has fully committed financing, consisting of
equity to be invested by TPG and the Canada Pension Plan, and
debt financing from Goldman Sachs Group Inc (GS.N).

TPG is the bigger investor of the pair, said Mark Wiseman,
senior vice president of private investments at Canada Pension
Plan Investment Board.

"We have a very longstanding relationship with TPG, so we
were working with them on this opportunity from the outset,"
Wiseman said.

Shares of IMS, which last month confirmed it was exploring
strategic alternatives, soared 23.3 percent to close at $20.73
on the New York Stock Exchange.

The deal represents a 31 percent premium on the share price
on Wednesday, and a 50 percent premium on the closing share
price on Oct. 16, the day before IMS said it was considering
its strategic alternatives.

IMS attracted interest from a number of rival private
equity firms including Silver Lake and BC Partners, which
submitted a joint bid, a source previously told Reuters.

Nielsen Co [VAQHLN.UL], the market research firm formerly
known as VNU NV, had tried to buy IMS in 2005, but walked away
from the deal amid pressure from shareholders.

It had been expected that the company would not be sold to
a healthcare firm, sources previously said. IMS provides
sensitive market data to many competing health care companies,
so IMS feared it would lose customers if it aligned with one
corporate buyer, sources said.

"This is a strong defensive business with recurring cash
flows, longstanding customer relationships, and it's an
industry leader," said Wiseman. "For us to have an opportunity
to invest a substantial sum into this kind of business, we
think is very attractive in our portfolio."

Wiseman said that the deal was "capitalized reasonably
conservatively, taking into account the low volatility of the
company cash flow".

The deal follows a spate of deals in the wider healthcare
and pharmaceuticals industry, such as Wyeth's $68 billion union
with Pfizer Inc (PFE.N).

IMS was advised by Deutsche Bank (DBKGn.DE) while the
private equity buyers were advised by Goldman, Sachs & Co.,
Bank of America Corp's (BAC.N) BofA Merrill Lynch, Barclays
Plc's (BARC.L) Barclays Capital, Evercore Partners, and
JPMorgan Chase & Co (JPM.N). Lazard provided a fairness opinion
on the deal.

Law firm Ropes & Gray advised the private equity firms
while Sullivan & Cromwell advised IMS.
(Reporting by Megan Davies, additional reporting by Paritosh
Bansal, Pav Jordan and Jessica Hall; Editing by Gerald E.
McCormick, Maureen Bavdek and Matthew Lewis)