IHS and Markit merge to create £9bn data giant

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Two of the world’s largest market data companies, IHS and Markit, are to merge in a deal worth $13 billion (£9 billion), creating a powerhouse in economic, corporate and debt data and analysis. 

The merger of IHS, which is listed on the New York Stock Exchange, and Markit, which is listed on Nasdaq but is a British company, will be effected through an all-share deal which has been approved by both companies’ boards. 

Lans Uggla, Canadian founder, chairman and chief executive of Markit, said: “This is an exciting transaction. Together, we will create a global information powerhouse and a platform for innovation that drives future revenue. The combination will enhance cash flow and enable stronger returns of capital to shareholders.”

The new company will be headquartered in London, and IHS chairman and chief executive Jerre Stead will be its first chairman, to be followed on his retirement in 2018 by Uggla. 

Uggla’s 3% shareholding in Markit is worth some $177 million. Co-founder Kevin Gould owns a 2% stake worth around $108 million. 

Markit was founded in 2003 and employs 4,200 in 13 countries. It floated in June 2014 at $24 a share, and today they were trading at $29.49.

IHS employs nearly 9,000 in 32 countries. It was founded in 1959 as the Rogers Publishing Company, producing technical news magazines, and was one of the earliest cataloguers of data on microfilm. It floated on the New York Stock Exchnage in 2005, and changed its name from Information Handling Services  to IHS.

Stead 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.”

The combined company’s revenues in 2015 were $3.3 billion and they made earnings before interest, tax, depreciation and amortisation of  $1.2 billion.

Together they have 50,000 customers around the world, and serve 75% of the Fortune 500. IHS shareholders will own approximately 57% and Markit shareholders will own approximately 43% of the combined company. 

The two companies said the merger would throw up cost savings of $125 million, which it said would come from lower spending on IT, selling off duplicate properties and merging head offices. They also said they expect the merger to create an extra $100 million of “revenue opportunities”.

Markit was started by Uggla in a barn in Hertfordshire 13 years ago. 

Despite choosing to float on Nasdaq in the US, Uggla said: “Listing in New York doesn’t mean we are not a UK company. In order for us to grow as a UK company and facilitate our expansion we needed the best access to capital.”

Source Article from http://www.standard.co.uk/business/business-news/ihs-and-markit-merge-to-create-9bn-data-giant-a3208311.html

March 22, 2016 |
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