Verisk closes Wood Mackenzie buy

Verisk Analytics Inc. said Tuesday it completed its buy of Wood Mackenzie Ltd. in a deal valued at about $2.8 billion. The seller was Hellman & Friedman. Verisk, of Edinburgh, United Kingdom, provides data analytics and commercial intelligence for the energy, chemicals, metals and mining verticals.


ERSEY CITY, N.J., May 19, 2015 – Verisk Analytics, Inc. (Nasdaq: VRSK) (the “Company”), a leading data analytics provider, today announced that it completed the acquisition of Wood Mackenzie Limited (“WoodMac”). Wood Mackenzie is a global leader in data analytics and commercial intelligence for the energy, chemicals, metals and mining verticals. The purchase price was £1.85 billion (approximately $2.8 billion, net of foreign currency hedges).

“We’re pleased to have completed the acquisition of WoodMac, and delighted to welcome the team into the Verisk family,” said Scott Stephenson, president and chief executive officer of Verisk Analytics. “This is a strategic acquisition that adds another Verisk-like business in a large, dynamic, and global vertical. We expect a quick and smooth integration, and are ready to pursue a range of combined company opportunities starting immediately.”

“We’re thrilled to be part of Verisk which will give us a larger platform and broader solution set with which we can continue to serve our customers with excellence,” said Stephen Halliday, chief executive officer of Wood Mackenzie.

WoodMac delivered solid results for first-quarter 2015, with revenue growth of 8.7% in GBP and EBITDA growth of 9.5% (excluding exceptional costs), as disclosed in recent filings. Consistent with comments made at the time of the announcement, the Company expects WoodMac revenue growth, in GBP, for the full year in the high single digits with continued strong profitability.

The Company financed the acquisition through:
• an equity offering with net proceeds of $722 million from the sale of 10.6 million shares at $70.00 per share
• bond offerings of $900 million of 4.0% Senior Notes due 2025 and $350 million of 5.5% Senior Notes due 2045
• borrowings of approximately $1.0 billion under its new $1.75 billion revolving credit facility due May 2020, and cash on hand

As a part of the transaction, the Company repaid the remaining $85 million of private placement debt.

Pro forma for acquisition debt and as of March 31, 2015, the Company had total debt, both short term and long term of $3.3 billion and pro forma leverage of 3.4x Debt/EBITDA. The company expects interest expense for 2015 to be $122.7 million. The annualized interest rate based on the capital structure at close is about 3.8%. The company intends to deleverage to 2.5x Debt/EBITDA by year end 2016.

Pro forma for the sale of stock and as of March 31, 2015, there were 172.1 million fully diluted shares outstanding.

The Company continues to work to finalize the valuation of acquired intangibles and currently estimates intangible amortization will be in a range of $135-140 million in 2015 including the Wood Mackenzie amortization. Capital expenditures for the Company for 2015 are now expected to be about $170 million. Fixed asset depreciation and amortization for 2015 is now expected to be in a range of $120-125 million, reflecting about $110 million for Verisk excluding WoodMac.

The 2015 normalized tax rate (excluding one-time items) for the combined company is estimated to be around 37.5%. The Company continues to expect its cash tax payments to reflect the lower corporate tax rate at Wood Mackenzie.

The transaction is expected to be $0.08 to $0.10 accretive to Adjusted EPS in the second half of 2015. The Company expects to exclude transaction and financing related fees and the impact from the purchase price hedge in its calculation of Adjusted EPS when it reports second-quarter 2015 results.

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Editor’s notes
About Verisk Analytics
Verisk Analytics (Nasdaq: VRSK) is a leading data analytics provider serving customers in insurance, healthcare, financial services, government and risk management. Using advanced technologies to collect and analyze billions of records, Verisk Analytics draws on vast industry expertise and unique proprietary data sets to provide predictive analytics and decision support solutions in fraud prevention, actuarial science, insurance coverages, fire protection, catastrophe and weather risk, data management and many other fields. In the United States and around the world, Verisk Analytics helps customers protect people, property and financial assets.
About Wood Mackenzie:
Wood Mackenzie is a global leader in commercial intelligence for the energy, chemicals, metals and mining industries, providing objective analysis and advice on assets, companies, and markets to leading international and national energy and metals companies as well as financial institutions and governments. Since 1974, we have been providing our clients with the timely data, insights and analysis they need to make better strategic decisions. For more information, visit: or follow us on Twitter @WoodMackenzie