IHS and Markit have signed 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 both companies.
Upon completion of the merger, the combined company will be renamed IHS Markit and will be headquartered in London, with certain operations based in Englewood, Colorado. IHS shareholders will own approximately 57 percent and Markit shareholders will own approximately 43 percent 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, an implied per share price of Markit common shares of $31.13.
IHS Markit will be a leader in information, analytics and solutions, and will have non-overlapping customers and products, a strong financial profile and a world-class management team, according to the two companies. The business also will 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 percent of the Fortune Global 500, creating significant 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 CEO, 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 CEO of Markit, added, “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, the two companies say. Stead will assume the role of chairman of the board of directors and CEO 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 CEO of IHS Markit upon Stead’s retirement on Dec. 31, 2017.
The board of directors for the combined company will be comprised of 11 members, with IHS designating six members (including the chairman) and Markit designating five members (including the lead director) from their current boards.
