Wednesday 20 June 2018

IHS Markit to boost service with €1.6bn Ipreo deal

IHS Markit CEO Lance Uggla. Photo: Spencer Platt/Getty Images
IHS Markit CEO Lance Uggla. Photo: Spencer Platt/Getty Images

Donal Griffin

IHS Markit, a provider of financial data, will pay around $1.9bn (€1.6bn) to acquire its smaller rival Ipreo from funds managed by Blackstone and Goldman Sachs.

Ipreo provides information to firms raising capital and the transaction is the latest in the financial-data sector, which has been increasing in size. In January, a group led by Blackstone agreed to buy a majority stake in Thomson Reuters' financial and risk unit in a deal that valued the business at $20bn.

The Ipreo deal should be completed in the second half of this year subject to regulatory approval, according to separate statements. Goldman Sachs and Blackstone, both based in New York, bought Ipreo in 2014 from KKR for about $975m, a person with knowledge of the matter said.

"Ipreo has an extremely strong brand in financial markets," IHS Markit CEO Lance Uggla said in the statement. "Across multiple product lines, we will deliver a more comprehensive service that will allow clients to streamline their workflow and make quicker and better decisions."

The Ipreo deal values that business at 16 times adjusted earnings before interest, tax, depreciation and amortization in 2019, London-based IHS Markit said. The "high-growth" business will have "double-digit organic growth" in that year and be accretive to adjusted earnings per share, the company said.

Customers spent $28.5bn on market data last year, a 3.6pc increase on 2016, according to Burton-Taylor International Consulting.

IHS Markit will also seek to sell MarkitSERV, a derivatives-processing unit, after a "detailed review of its financial-services businesses," the firm said. That division helps customers trade so-called over-the-counter (OTC) derivatives, financial instruments typically traded directly between buyers and sellers rather than through an exchange. (Bloomberg)

Irish Independent

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