- Additional Proxy Soliciting Materials (definitive) (DEFA14A)
02 Juni 2010 - 12:03PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant
x
Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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¨
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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¨
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Definitive Proxy Statement
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x
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Definitive Additional Materials
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¨
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Soliciting Material under §240.14a-12
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inVentiv Health, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
¨
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and
state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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¨
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Fee paid previously with preliminary materials.
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¨
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously.
Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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EXPLANATORY NOTE
Beginning on June 1, 2010, representatives of inVentiv Health, Inc. (the Company) intend to make certain disclosures on the
Companys forums, which may include investor conferences, presentations to analysts and presentations to bankers. Such disclosures may include the information contained below. The Company is furnishing the information below pursuant to
Regulation FD.
The information below is summary information that is intended to be considered in the context of the Companys Securities
and Exchange Commission (SEC) filings and other public announcements that the Company may make, by press release or otherwise, from time to time. The Company undertakes no duty or obligation to publicly update or revise the information
below, although it may do so from time to time as its management believes is warranted. Any such updating may be made through the filing of other reports or documents with the SEC, through press releases or through other public disclosure. By
furnishing the information below, the Company makes no admission as to the materiality of any information contained herein or therein.
Company Information
SUMMARY HISTORICAL FINANCIAL DATA ; Non GAAP Reconciliations
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($ in millions)
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Fiscal Year Ended December 31,
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Three Months
Ended
(1)
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LTM
(1)
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2007
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2008
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2009
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3/31/2009
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3/31/2010
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3/31/2010
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Total Revenues:
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Clinical
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$186.9
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$216.9
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$209.5
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51.2
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53.9
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$212.3
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Communications
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289.1
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341.9
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309.9
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70.9
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88.1
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327.1
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Commercial
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400.8
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435.1
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413.3
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107.0
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96.6
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417.0
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Patient Outcomes
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100.5
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125.9
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139.2
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28.6
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30.7
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127.3
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Total Revenues
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$977.3
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$1,119.8
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$1,072.0
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$257.7
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$269.4
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$1,083.7
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% growth
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N/C
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14.6%
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(4.3%)
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N/C
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4.5%
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N/C
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Total Net Revenues
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$796.7
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$951.7
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$927.9
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$221.0
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$229.6
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$936.5
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% growth
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N/C
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19.5%
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(2.5%)
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N/C
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3.9%
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N/C
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Gross Profit:
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Clinical
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$59.4
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$67.4
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$55.7
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12.6
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13.6
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$56.7
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Communications
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113.3
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142.7
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140.3
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32.1
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35.8
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144.1
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Commercial
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83.1
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87.5
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86.5
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18.4
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21.9
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89.9
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Patient Outcomes
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39.9
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49.8
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59.8
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13.3
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13.9
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60.3
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Total Gross Profit
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$295.7
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$347.4
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$342.3
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$76.5
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$85.2
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$351.0
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% of Net Revenues
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37.1%
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36.5%
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36.9%
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34.6%
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37.1%
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37.5%
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SG&A:
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Clinical
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$45.2
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$50.6
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$45.3
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11.1
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11.9
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$46.1
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Communications
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71.3
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99.2
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93.8
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22.2
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25.2
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96.9
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Commercial
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45.5
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43.3
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45.3
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11.4
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11.0
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44.9
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Patient Outcomes
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21.6
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26.9
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30.8
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7.4
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7.8
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31.1
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Other
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17.3
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21.7
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26.6
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5.1
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7.5
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29.0
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Total SG&A
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$200.9
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$241.7
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$241.8
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$57.2
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$63.4
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$248.0
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Impairment of Goodwill and Other Intangible Assets
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267.8
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EBIT
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$94.8
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$(162.2)
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$100.6
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$19.3
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$21.7
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$103.0
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Net Interest Expense
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17.7
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23.5
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22.9
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5.7
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7.5
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24.7
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Earnings before Taxes
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$77.1
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$(185.6)
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$77.6
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$13.6
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$14.2
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$78.3
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Tax Expense / (Benefit)
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29.4
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(58.2)
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29.9
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5.8
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3.9
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28.0
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(Income) / Loss from Equity Investments
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(0.6)
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0.1
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0.1
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(0.0)
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0.1
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0.2
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Gains on Disposals of Discontinued Operations
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(0.3)
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(0.7)
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Net Income / (Loss) Attributable to Noncontrolling Interest
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1.1
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1.1
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0.8
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(0.1)
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0.2
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1.1
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Net Income (Loss) Attributable to inVentiv
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$47.5
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$(128.0)
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$46.9
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$7.9
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$10.1
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$49.1
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EBITDA Reconciliations:
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Plus: Tax Expense / (Benefit)
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29.4
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(58.2)
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29.9
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5.8
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3.9
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28.0
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Plus: Net Interest Expense
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17.7
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23.5
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22.9
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5.7
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7.5
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24.7
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Plus: Depreciation
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18.2
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20.9
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20.9
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5.4
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5.7
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21.3
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Plus: Amortization
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10.9
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15.1
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12.4
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3.2
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3.2
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12.4
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EBITDA
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$123.7
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$(126.8)
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$133.0
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$27.0
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$30.4
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$135.4
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Less: Gains on Disposals of Discontinued Operations
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(0.3)
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(0.7)
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Plus: Impairment of Goodwill and Other Intangible Assets
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267.8
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Plus: Receivables Reserve
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8.1
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Less: Acquisition-related Incentive
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(1.5)
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Plus: Impairment Loss / (Gain) on Marketable Securities
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0.8
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2.6
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(0.4)
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(0.4)
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Adjusted EBITDA
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$130.9
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$143.0
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$132.6
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$27.9
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$30.4
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$135.1
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% of Net Revenues
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16.4%
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15.0%
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14.3.%
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12.6%
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13.2%
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14.4%
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% growth
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N/C
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9.3%
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(7.3%)
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N/C
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8.6%
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N/C
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Stock-Based Compensation - Non-Cash
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9.7
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10.6
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8.9
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2.6
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2.2
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8.6
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Adjusted EBITDA excl, Stock-Based Compensation
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$140.6
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$153.6
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$141.5
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$30.5
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$32.5
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$143.7
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% of Net Revenues
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17.6%
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16.1%
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15.3%
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13.8%
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14.2%
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15.3%
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% growth
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N/C
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9.2%
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(7.8%)
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N/C
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6.6%
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N/C
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Capital Expenditures
(2)
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10.4
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17.4
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25.4
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4.7
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3.1
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23.8
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% of Net Revenues
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1.3%
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1.8%
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2.7%
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2.1%
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1.3%
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2.5%
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* N/C: Not
Calculated
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(1)
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Includes a reclassification of TTI results from Patient Outcomes to Commercial.
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(2)
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Disclosed on Statement of Cash Flows as Purchase of Property and Equipment.
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PRO FORMA LTM 3/31/2010 ADJUSTED EBITDA RECONCILIATION
The following information reflects certain results of operation of the Company for the twelve month period ending March 31, 2010. The Pro Forma LTM
Adjusted EBITDA Reconciliation reflects the Adjusted EBITDA of the Company for such period, further adjusted to reflect certain potential cost savings and other adjustments described below assuming the transactions contemplated by the Agreement and
Plan of Merger, dated May 6, 2010, as it may be amended from time to time, providing for the acquisition of the Company by Papillon Holdings, Inc. an entity owned by certain affiliates of Thomas H. Lee Partners, L.P. had been consummated on
April 1, 2009. The adjustments are not intended to reflect all of the cost savings that may be realized following consummation of such transactions and the results of operation of the company following such transaction may be more positive or
less positive than the results reflected below:
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Net Income (Loss) Attributable to inVentiv
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$
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49.1
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Plus: Tax Expense
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28.0
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Plus: Net Interest Expense
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24.7
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Plus: Depreciation
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21.3
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Plus: Amortization
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12.4
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EBITDA
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$
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135.4
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Plus: Impairment Gain on Marketable Securities
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(0.4
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)
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Adjusted EBITDA
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$
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135.1
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Stock-Based Compensation (Non-Cash)
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8.6
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Adjusted EBITDA excel. Stock-Based Compensation
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$
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143.7
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Severance (1)
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2.9
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Legal Reserve (2)
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1.5
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Tax Reclassifications(3)
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4.2
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Estimated Public Company Cost Reductions (4)
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0.9
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Pro Forma Impact of Acquisitions (5)
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2.0
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Net Income Attributable to Non-Controlling Interests
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1.1
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Pro Forma Adjusted EBITDA
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$
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156.3
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(1)
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Non-recurring employee severance costs.
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(2)
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Legal reserve related to customer dispute.
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(3)
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Reclassification of non-cash tax expense from SG&A to tax provisions related to certain pre-acquisition tax contingencies.
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(4)
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Estimate of public company cost reductions post Transaction.
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(5)
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Pro forma impact of the Companys acquisition of Paragon RX in December 2009 and Essential Group in February 2010.
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Segment-Adjusted
EBITDA
(1)
; Non GAAP Reconciliations
The following information reflects a reconciliation of the operating income of the Company on a segment basis for the twelve month period ending
March 31, 2010 to Segment-Adjusted EBITDA for such period.
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inVentiv
Clinical
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inVentiv
Commercial
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inVentiv
Communications
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inVentiv
Patient
Outcomes
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Corporate
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Total
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(in millions)
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LTM
3/31/2010*
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LTM
3/31/2010*
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LTM 3/31/2010*
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LTM
3/31/2010*
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LTM
3/31/2010*
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LTM
3/31/2010*
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Operating income
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$10.5
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$45.1
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$47.3
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$29.2
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($29.0
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$103.0
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Add: Depreciation
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3.1
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13.0
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3.9
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1.4
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0.0
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21.3
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Add: Amortization
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1.1
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1.3
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6.8
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3.2
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0.0
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12.4
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Less: Gain on Marketable Securities
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0.0
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0.0
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0.0
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0.0
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(0.4
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(0.4
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)
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Less: Income Attributable to Noncontrolling Interest
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0.0
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0.0
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(1.1
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)
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0.0
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0.0
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(1.1
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)
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Less: Loss from Equity Investments
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0.0
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0.0
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(0.1
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)
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0.0
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0.0
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(0.1
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)
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Segment-Adjusted EBITDA
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$14.7
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$59.4
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$56.7
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$33.8
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($29.4
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)
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$135.1
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Add: Stock Compensation Expense
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1.1
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1.7
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1.8
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0.6
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3.4
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8.6
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Segment-Adjusted EBITDA excluding stock compensation expense
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$15.8
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$61.1
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$58.5
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$34.4
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($26.0
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)
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$143.7
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*
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Last Twelve Months ended March 31, 2010
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(1) We
define Segment Adjusted EBITDA as segment operating income after the adjustments shown in the table above. We are not able to reconcile Segment Adjusted EBITDA to net income because we do not record net income by segment. Segment
Adjusted EBITDA is not equivalent to Adjusted EBITDA as presented in the prior tables because we have not allocated net interest expense and tax expense on a division basis.
Note: This Exhibit contains the non-GAAP financial measures EBIT, EBITDA, Adjusted EBITDA and Segment Adjusted
EBITDA. These non-GAAP measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based
on any comprehensive set of accounting rules or principles.
Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. Management
believes that the non-GAAP financial measures included in this exhibit, when shown in conjunction with the corresponding GAAP measures, is useful to investors for the reasons discussed above. Management uses these non-GAAP financial measures in
assessing the performance of our operations on a consistent basis from period to period.
FORWARD-LOOKING STATEMENTS
This filing contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. The statements contained in this communication that are not purely historical are forward-looking statements. Forward-looking statements give the Companys current expectations or forecasts of future events. Such statements are
subject to risks and uncertainties that are often difficult to predict and beyond the Companys control, and could cause the Companys results to differ materially from those described. These uncertainties and other factors include, but
are not limited to, risks associated with this transaction, including the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement, the inability to complete the transaction due to the
failure to obtain shareholder approval or the failure to satisfy other conditions to completion of the transaction, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, failure to obtain,
delays in obtaining or adverse conditions contained in any required regulatory or other approvals and the failure to obtain the necessary debt financing arrangements set forth in the debt commitment letter received in connection with the
transaction. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statement,
whether as a result of new information, future events or otherwise, except as required by law or the rules of the Nasdaq Global Select Market. Accordingly, any forward-looking statement should be read in conjunction with the additional information
about risks and uncertainties as discussed in the Companys filings with the Securities and Exchange Commission (the SEC).
Additional Information and Where to Find It.
On May 28, 2010, the Company filed a preliminary proxy statement with the SEC concerning the previously announced proposed transaction, which will be
subject to review by the SEC. The definitive proxy statement will be mailed to stockholders of the Company.
INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE DEFINITIVE PROXY STATEMENT AND OTHER DOCUMENTS WHEN THEY BECOME AVAILABLE BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY AND THE PROPOSED TRANSACTION.
Investors and security holders may obtain a free copy of the definitive proxy statement (when available) and other documents filed by the Company with the
SEC at the SECs Web site at
www.sec.gov
. The definitive proxy statement and such other documents will also be available for free on the Companys website at www.inventivhealth.com under Investor Relations or by directing such
request to Investor Relations, inVentiv Health at 800-416-0555.
The Company and its directors, executive officers and other members of its
management and employees may be deemed to be participants in the solicitation of proxies from its stockholders in connection with the proposed transaction. Information concerning the interests of the Companys participants in the solicitation
is set forth in the Companys Annual Reports on Form 10-K for the year ended December 31, 2009, filed with the SEC on February 24, 2010, the Companys proxy statement for its 2010 annual meeting of stockholders, filed with the
SEC on April 23, 2010, and in the definitive proxy statement relating to the proposed transaction when it becomes available.
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