IHS Markit to buy Ipreo for $1.85 billion, sell MarkitSERV
Staff Writer |
IHS Markit has signed a definitive agreement to acquire Ipreo, a leading financial services solutions and data provider, for $1.855 billion from private equity funds managed by Blackstone and the Goldman Sachs Merchant Banking Division.
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The acquisition is expected to close in the second half of 2018, subject to customary closing conditions and regulatory filings and approvals, including with the UK Financial Conduct Authority and under the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976.
IHS Markit also announced that, following a detailed review of its financial services businesses as part of a disciplined capital allocation strategy, it has initiated a process to sell MarkitSERV, its derivatives processing business.
MarkitSERV is a provider of end-to-end trade processing and workflow solutions across OTC derivatives asset classes.
Ipreo supports all participants in the capital-raising process, including banks, public and private companies, institutional and individual investors as well as research, asset management and wealth management firms.
Ipreo products and services minimize the increasing costs and complexities of capital markets and offer solutions to the high demand for regulation and compliance, industry cost pressures and steep costs associated with building and maintaining in-house systems. Based in New York City, Ipreo currently employs more than 1,700 people.
The Ipreo purchase price of $1.855 billion represents an effective 2019 forward Adjusted EBITDA multiple of 16x. After adjusting for a tax step-up, the effective multiple is 15x.
This high-growth business is expected to achieve double-digit organic growth in 2019, and be accretive to 2019 Adjusted EPS.
IHS Markit has received committed debt financing for the acquisition. IHS Markit’s expected leverage ratio as defined in its credit facility is expected to be approximately 3.6x at close, delevering to below 3.0x by third quarter 2019.
IHS Markit will suspend its share repurchase program until leverage returns to its targeted 2-3x leverage range. ■