IHS, Markit To Merge In Deal Valued At More Than $13 Bln

(RTTNews) - Information and analytics firm IHS Inc. (IHS) and UK-based financial information services provider Markit Ltd. (MRKT) said Monday that they have agreed to combine in an all-share merger of equals.

The transaction, with an implied equity value of more than $13 billion, has been approved by the board of directors of both companies.

Under the terms of the deal, IHS shareholders will receive 3.5566 common shares of IHS Markit for each share of IHS common stock.

Based upon the IHS closing price of $110.71 on March 18, 2016, this implies a per share price of Markit common shares of $31.13 and represents a 5.6 percent premium to Markit's closing stock price of $29.49 per share on Friday.

The transaction is expected to be immediately accretive to the combined company's adjusted earnings per share, with mid-teens accretion in 2018. The new company expects to realize cost synergies of $125 million by year-end 2019 and also deliver about $100 million of run rate revenue opportunities by fiscal year 2019.

Upon completion of the merger, the combined company will be renamed IHS Markit. It will be headquartered in London and will have certain key operations based in Englewood, Colorado.

IHS shareholders will own about 57 percent of the combined company, while Markit shareholders will own the remaining about 43 percent.

IHS Markit will have more than 50,000 key customers, including 75 percent of the Fortune Global 500 companies, creating significant cross-selling opportunities across multiple commercial industries and governments.

The combined company's reported results for fiscal year 2015 include about $3.3 billion in revenue, $1.2 billion in adjusted earnings before interest, taxes depreciation and amortization or EBITDA, and $800 million in free cash flow.

Jerre Stead, chairman and chief executive officer of IHS, will assume the role of chairman of the board of directors and CEO of IHS Markit. Lance Uggla, chairman and CEO of Markit, will be president and a member of the board. Uggla will assume the role of chairman of the board CEO of IHS Markit upon Stead's retirement on December 31, 2017.

The combined company's board of directors will be comprised of eleven members, with IHS designating six members, including the chairman. Markit will designate five members, including the lead director, from their current boards.

IHS closed Friday's trading at $110.71. In Monday's pre-market activity, the stock is up $2.29 or 2.07 percent to $113.00.

MRKT closed Friday's trading at $29.49, down $0.09 or 0.30 percent on a volume of 335,936 shares.