Verisk Analytics, Inc., a leading data analytics provider, has announced it has signed a definitive agreement to acquire Wood Mackenzie from Hellman & Friedman and other Wood Mackenzie shareholders. Wood Mackenzie is a global leader in data analytics and commercial intelligence for the energy, chemicals, metals and mining verticals. The acquisition establishes Verisk as a trusted data analytics provider at the centre of the global energy market, similar to its position in the property/casualty insurance industry. The transaction advances Verisk’s strategy to expand internationally and positions the company in markets that relate closely to the company’s existing supply chain and climate risk initiatives, which are central to the global economy of the 21st century.
Based in Edinburgh, Wood Mackenzie has a track record of more than 40 years providing objective analysis and advice on energy assets, companies, and markets, giving clients in more than 80 countries around the world the insight they need to make better asset investment and portfolio allocation decisions. Wood Mackenzie’s diverse, blue chip customer base includes more 800+ international and national energy and metals companies, financial institutions, and governments. Wood Mackenzie works with strategy and policy makers, business development executives, market analysts, corporate finance professionals, risk teams, and investors.
Wood Mackenzie leverages predictive models and robust proprietary data gathered over the past century to describe and value assets, forecast their future productivity and value, and provide clients with trusted strategic advice. Wood Mackenzie’s global teams of experts analyze the data, ensuring a deep understanding of the company’s extensive global data sets and the end markets they describe. Wood Mackenzie advisers work directly with clients to address their business challenges. Wood Mackenzie has approximately 1000 employees worldwide with offices in Edinburgh, Dubai, Houston, London, Singapore, and Sydney.
“Wood Mackenzie is a world-class company and an excellent addition to the Verisk family,” said Scott Stephenson, president and chief executive officer of Verisk Analytics. “The company has significant opportunities in the global energy, chemicals, metals and mining verticals, a track record of consistent revenue growth and profitability, distinctive and mission-critical solutions, and an impressive management team. Those are all features of a unique and wonderful business.”
“The culture of Wood Mackenzie is well aligned with that of Verisk, and we are eager to welcome our new colleagues. We think the people, the opportunity, and the business are a wonderful fit for who we are and what we aspire to be,” concluded Stephenson.
“This combination is a natural home for the business we’ve built over the years and a great opportunity for our customers and employees,” said Stephen Halliday, chief executive officer of Wood Mackenzie. “Our teams stand ready to build on the strength of our existing solutions with the benefit of Verisk’s analytic expertise, customer relationships, and financial resources.”
Patrick Healy, Managing Director and Deputy CEO of Hellman & Friedman said: “It has been a great privilege to be the partner of Wood Mackenzie. Together we made significant investments in technology and in new product development to further enhance the client user experience. Wood Mackenzie is positioned for continued growth and innovation with Verisk as its new partner.”
The purchase price is £1.850 billion (approximately US$2.8 billion) to be paid in cash, subject to typical closing adjustments. Verisk intends to finance the transaction through a combination of about US$2 billion in debt and up to US$800 million in equity. Pro forma for the acquisition, Verisk expects to maintain its investment-grade debt ratings and intends to de-lever to approximately 2.5x Debt/EBITDA by the end of 2016.
For the year ended 31 December 2014, Wood Mackenzie’s revenue and EBITDA were £227 million and £107 million, respectively, representing an EBITDA margin of 47.1%. The transaction is expected to be US$0.08 to US$0.10 accretive to adjusted EPS in the second half of 2015 based on a close date of 30 June. Assuming a full year of 2015 Wood Mackenzie results, the transaction is expected to be US$0.16-0.20 accretive for 2015. Both accretion estimates exclude transaction-related fees and adjust for transitional accounting items.
The transaction is expected to close during the second quarter of 2015, subject to the completion of customary closing conditions, including receipt of regulatory approvals. Stephen Halliday, Wood Mackenzie’s CEO, will continue to lead the business, reporting to Verisk president and CEO, Scott Stephenson.
Adapted from press release by Joseph Green