U.S. business research provider IHS Inc (IHS.N) said on Monday it would buy Markit Ltd (MRKT.O) in an all-stock deal valuing the London-based financial data company at about US$5.9 billion.
IHS shareholders will own about 57 percent of the combined company, which will be based in London and have a total market value of more than US$13 billion.
IHS, whose businesses include Jane’s Defence Weekly and technology research firm iSuppli, will pay the equivalent of US$31.13 per Markit share, a premium of 5.6 percent to Markit’s Friday close.
Englewood, Colorado-headquartered IHS, which has been on an acquisition spree, said its shareholders would get 3.5566 common shares of the combined company, IHS Markit, for each share held.
Markit’s top shareholders include U.S. equity firm General Atlantic LLC, Singapore state investor Temasek Holdings Pte Ltd and Canada Pension Plan Investment Board.
IHS’s energy business, its biggest division, provides research on energy and chemicals, including global well, production and field information to oil and gas companies.
However, revenue in the business has been falling as clients slash spending in response to lower oil prices. Revenue in the division fell almost 1 percent to US$215.9 million in the first quarter ended February 29.
Stronger-than-expected total revenue in quarter was helped by a jump in non-subscription revenue, which includes organizing industry events.
IHS said in January it would buy U.S.-based Oil Price Information Service (OPIS) to add real-time pricing information to its energy analytics business.
The company agreed in December to buy Canada-based vehicle data provider Carproof Corp for US$460 million to boost its automotive research business.
IHS, however, abandoned its buyout of software maker Solera Holdings Inc (SLH.N) in September.
IHS Markit, while headquartered in London, will have certain key operations in Colorado, the companies said.
M. Klein and Co and Goldman, Sachs & Co were IHS’s financial advisers, while Markit’s financial adviser was J.P. Morgan Securities LLC.
IHS competes with Thomson Reuters Corp (TRI.TO) and Bloomberg LP in providing financial data to investors.
Up to Friday’s close of US$110.71, IHS shares had fallen 6.5 percent this year. The stock hit a more than 3-year low of US$92.90 last month.
Markit’s shares have fallen 2.3 percent this year.
Both shares were untraded before the opening bell on Monday.
(Reporting by Abhirup Roy in Bengaluru; Editing by Anupama Dwivedi)
Photo courtesy of Reuters/Adrees Latif