S&P Global announced the acquisition of IHS Markit in an all-stock transaction valued at around $44 bn, including $4.8 bn of net debt. Combined these two companies would create one of the largest data providers, rivalling behemoths Bloomberg and Refinitiv.
Together they will offer financial information and services, ratings, indices, commodities and energy, and transportation and engineering. In addition, they will provide analytics in environment, social and governance (ESG), climate and energy transition.
The pro forma company will have 76% recurring revenue and expects to realise 6.5%-8% annual organic revenue growth in 2022 and 2023, balanced across major industry segments.
The merger is also expected to deliver annual run-rate cost synergies of approximately $480m, with around $390m expected by the end of the second-year post-closing.
The deal is expected to be finalised in the second half of 2021 subject to regulatory as well as shareholder approvals.
The company will be headquartered in New York with operations across North America, Latin America, Europe Middle East Africa and Asia Pacific. The leadership team will comprise of senior leaders from both organisations.
Douglas Peterson, president and chief executive officer of S&P Global, will become CEO of the combined company while Ewout Steenbergen, executive vice president and chief financial officer of S&P Global, will serve as CFO of the combined company.
Lance Uggla, chairman and chief executive officer of IHS Markit, will stay on as a special advisor to the company for one year following closing. He founded Markit in 2003 and merged with IHS four years ago.
He said, “This transaction is a win for both IHS Markit and S&P Global as we leverage our respective strengths in information, data science, research and benchmarks. Our highly complementary products will deliver a broader set of offerings across multiple verticals for the benefit of our customers, employees and shareholders. Our cultures are well aligned, and the combined company will provide greater career opportunities for employees. “
Peterson said, “This merger increases scale while rounding out our combined capabilities and accelerates and amplifies our ability to deliver customers the essential intelligence needed to make decisions with conviction.
IHS Markit had been considered a potential takeover target for a large exchange, in particular ICE, ever since the London Stock Exchange reached its own agreement with Refinitiv for $27bn last year.