Vestar Capital Partners agrees to buy ISS for $364 mln

Vestar Capital Partners has agreed to acquire Institutional Shareholder Services from MSCI for $364 million. The transaction is expected to be completed in the second quarter of 2014. Morgan Stanley served as financial advisor to MSCI on the transaction. ISS is a provider of proxy advisory and corporate governance solutions to financial market participants.

PRESS RELEASE

ROCKVILLE, Md. & NEW YORK–(BUSINESS WIRE)–Institutional Shareholder Services Inc. (“ISS”), a leading provider of corporate governance solutions to the global financial community, today announced its parent company, MSCI Inc. (NYSE: MSCI), had entered into a definitive agreement with Vestar Capital Partners (“Vestar“), pursuant to which Vestar has agreed to acquire ISS for $364 million. The transaction is expected to close in the second quarter, subject to customary closing conditions.
ISS will operate independently once the transaction is completed. The current ISS executive team will remain in place.
“With Vestar’s support, the management team looks forward to advancing ISS‘ long-standing mission of providing world-class corporate governance solutions in an independent and transparent manner,” said Gary Retelny, President of ISS. “Clients will continue to see expanded product offerings, innovative solutions, and the same high level of service that ISS has delivered to institutional investors, corporations, and governance practitioners globally for nearly three decades.”
Also commenting on the transaction, Vestar Capital Partners‘ Robert L. Rosner, Founding Partner and Co-President, said ISS‘ position in the industry, future prospects, and strong management team appealed significantly to the New York-based private equity firm.
“This transaction underscores our belief in the importance of corporate governance and ISS‘ leadership position within the industry. ISS is a market leader in providing corporate governance solutions, with strong client retention rates and a powerful commitment to operating impartially. We fully support the ISS management team and its focus on innovation and providing unrivaled client service,” said Rosner.
MSCI acquired ISS in 2010 as part of its acquisition of RiskMetrics Group. ISS currently has close to 700 employees operating across 15 global offices in 10 countries. Its 1,700 clients include institutional investors, who rely on ISS‘ objective and impartial proxy research and data to vote portfolio holdings, as well as corporations focused on governance risk mitigation as a shareholder-value enhancing measure.
Morgan Stanley acted as financial advisor and Davis Polk & Wardwell LLP acted as legal advisor to MSCI on the transaction. Simpson Thacher & Bartlett LLP served as legal advisor to Vestar Capital Partners.
About ISS
ISS, founded in 1985 as Institutional Shareholder Services Inc., is the world’s leading provider of proxy advisory and corporate governance solutions to financial market participants. ISS’ services include objective proxy research and analysis, end-to-end proxy voting and distribution solutions, turnkey securities class-action claims management, and reliable governance data and modeling tools. Clients rely on ISS’ expertise to help them make informed corporate governance decisions. For more information, please visit www.issgovernance.com.
About Vestar Capital Partners
Vestar Capital Partners is a leading U.S. middle market private equity firm specializing in management buyouts and growth capital investments. Vestar invests and collaborates with incumbent management teams and private owners in a creative, flexible and entrepreneurial way to build long-term enterprise value.
Vestar is targeting equity investments in the range of $50 million to $150 million in U.S. based middle-market companies with enterprise values ranging from $250 million to $1 billion. Vestar has extensive experience investing across a wide variety of industries including Financial Services, Information Services, Consumer, Healthcare, Digital Media and Diversified Industries.
Since Vestar’s founding in 1988, Vestar funds have completed more than 70 investments in companies with a total value of more than $40 billion. For more information, please visit www.vestarcapital.com.
About MSCI
MSCI Inc. is a leading provider of multi-asset class portfolio management tools, primarily to institutional investors, including asset managers, banks, hedge funds and pension funds. For equity investors, MSCI’s flagship performance and risk tools include: the MSCI indexes with approximately $7.5 trillion estimated to be benchmarked to them on a worldwide basis1; Barra factor models, portfolio risk and performance analytics; and ESG (environmental, social and governance) research screening, analysis and ratings. MSCI is also a leading provider of multi-asset class risk management tools including RiskMetrics multi-asset class market and credit risk analytics; Barra multi-asset class factor models, portfolio risk and performance analytics. MSCI also provides IPD real estate information, indexes and analytics for investors in and managers of commercial real estate. MSCI also offers ISS governance research and outsourced proxy voting and reporting services; and FEA valuation models and risk management software for the energy and commodities markets. MSCI is headquartered in New York, with research and commercial offices around the world.

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