London, England, and Englewood, CO. (BUSINESS WIRE). IHS and Markit today announced the signing of a definitive agreement under which the companies will combine in an all-share merger of equals to create a global leader in critical information, analytics, and solutions. Based on the closing prices of IHS and Markit common stock on March 18, 2016, the implied equity value of the transaction is more than $13 billion. The transaction has been unanimously approved by the board of directors of each company.
Upon completion of the merger, the combined company will be renamed IHS Markit and will be headquartered in London and have certain key operations based in Englewood, CO. IHS shareholders will own approximately 57% and Markit shareholders will own approximately 43% of the combined company on a fully diluted basis. IHS shareholders will receive 3.5566 common shares of IHS Markit for each share of IHS common stock, which based upon the IHS closing price of $110.71 on March 18, 2016, implies a per share price of Markit common shares of $31.13.
IHS Markit will have nonoverlapping customers and products. The company will also deliver next-generation information and analytics products to help customers improve decision making. IHS Markit will have more than 50,000 key customers, including 75% of the Fortune Global 500, creating cross-selling opportunities across multiple commercial industries and governments.
The combined company’s reported results for fiscal year 2015 include approximately: $3.3 billion in revenue, $1.2 billion in adjusted earnings before interest, taxes depreciation and amortization (EBITDA), and $800 million in free cash flow.
Jerre Stead, IHS chairman and chief executive officer, said, “This transformational merger brings together two information-rich companies to create a powerful provider of unique business intelligence, data, and analytics to a broad and complementary customer base. IHS Markit and its shareholders will benefit from enhanced product innovation to deliver strong returns across economic cycles. Importantly, the two companies are values-based organizations that have a strong cultural fit which focuses on customer satisfaction and colleague success.”
Lance Uggla, chairman and chief executive officer of Markit, said, “This is an exciting transaction for customers, employees, and shareholders of IHS and Markit. Together, we will create a global information powerhouse and a platform for innovation that drives future revenue. At the heart of our shared vision is the opportunity to offer our customers a broader and richer content set through both existing and new products that will support their critical decision making and manage regulatory change. The combination will enhance cash flow and enable stronger returns of capital to shareholders.”
The combination will be a merger of equals. Stead will assume the role of chairman of the board of directors and chief executive officer of IHS Markit. Uggla will be president and a member of the board of directors. Uggla will assume the role of chairman of the board of directors and chief executive officer of IHS Markit upon Mr. Stead’s retirement on December 31, 2017.
The board of directors of the combined company will comprise 11 members, with IHS designating six members (including the chairman) and Markit designating five members (including the lead director) from their current boards.
The transaction is expected to close in the second half of 2016, subject to customary closing conditions, including regulatory approvals and approval by both IHS and Markit shareholders. This will be a fully taxable transaction for IHS U.S. shareholders, which will allow the ability to offset capital losses against capital gains.
