Verisk Analytics reported on Tuesday it was planning to buy Wood Mackenzie for approximately $2.8 billion to bolster its efforts to expand internationally.
The acquisition is expected to be funded through a combination of debt and equity.
Verisk to acquire from PE firm
Verisk Analytics, Inc., a leading data analytics provider announced Tuesday that it had agreed to acquire the Scottish energy research firm Wood Mackenzie from its private equity owner Hellman & Friedman and other Wood Mackenzie shareholders.
Jersey-based Verisk intends to finance the purchase price of £1.850 billion (approximately $2.8 billion) with about $2 billion in debt and up to $800 million in equity.
Hellman & Friedman acquired a controlling stake in Wood Mackenzie in 2012 in a deal that valued the overall business at about £1.1 billion. Charterhouse Capital Partners, which acquired the business from Candover in 2009 retained a smaller stake in the business after the sale to Hellman & Friedman.
The British energy consultancy, Wood Mackenzie, leverages predictive models and robust proprietary data gathered over the past century to describe and value assets, forecast their future productivity and value, and provide clients with trusted strategic advice. It has a global presence with offices in Edinburgh, Dubai, Houston, London, Singapore and Sydney with approximately 1,000 employees.
The deal adds another Verisk-like business
Verisk Analytics is a leading provider of information about risk to professionals in insurance, healthcare, mortgage, government and risk management. The latest deal would advance Verisk’s strategy to expand internationally and positions the company in markets that relate closely to their existing supply chain and climate risk initiatives.
Scott Stephenson, president and chief executive officer of Verisk Analytics, said: “Wood Mackenzie has significant opportunities in the global energy, chemicals, metals and mining verticals, a track record of consistent revenue growth and profitability, distinctive and mission-critical solutions, and an impressive management team”. The proposed deal would add another Verisk-like business with deep vertical expertise, extensive proprietary data assets, a highly recurring revenue model and leading profit margins.
The latest deal would transform the combined company into a global leader in data analytics. The deal is expected to close during the second quarter of 2015, subject to regulatory approval.
The proposed acquisition is anticipated to be $0.08 to $0.10 accretive to adjusted EPS in the second half of 2015 based on a close date of June 30. Assuming a full year of 2015 Wood Mackenzie results, the transaction is expected to be $0.16-0.20 accretive for 2015. However, both accretion estimates exclude transaction-related fees and adjust for transitional accounting items.
Bloomberg data reveals Verisk’s latest deal is its biggest since acquiring Argus Information & Advisory Services LLC for $425 million in 2012 to gather data from credit-card issuers, and retail banks. Verisk’s CEO Stephenson favors businesses that gain from scale as he assembles databases that can be sold to subscribers.
Citing people familiar with the developments, last month Financial Times reported that McGraw Hill Financial Inc., the parent of Standard & Poor’s, was among bidders for Wood Mackenzie.