Englewood, CO-based IHS Inc. has agreed to combine with data provider Markit in an all-stock transaction valued at $13 billion.
IHS shareholders would own 57% of the combined company, to be known as IHS Markit, which would have a combined 50,000-plus customers. Although some IHS operations would remain in Colorado, the company would be headquartered in London.
“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,” said IHS CEO Jerre Stead. “IHS Markit and its shareholders will benefit from enhanced product innovation to deliver strong returns across economic cycles.”
As oil prices declined, IHS revenue did as well. Last year nonsubscription revenue fell 27% from 2014. Markit’s main customers are in the financial industry, which would help IHS diversify from its energy-focused business.
IHS, which among other things sponsors the annual IHS CERAWeek energy conference in Houston, provides research to customers in the energy, transportation, technology, media and telecommunications industries.
The combined company’s reported results for fiscal year 2015 include $3.3 billion in revenue, $1.2 billion in adjusted earnings and $800 million in free cash flow.
“This is an exciting transaction for customers, employees and shareholders of IHS and Markit,” said Markit CEO Lance Uggla. “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.”
Stead would be chairman and CEO of the combined company while Uggla would be president and member of the board. When Stead retires at the end of 2017, Uggla would become chair and CEO. The board would be comprised of 11 members, with IHS designating six.
The transaction is expected to close in the second half of 2016.