US-based information and analytics provider IHS Inc. (NYSE: IHS) and UK data company Markit Ltd. (NASDAQ: MRKT) today announced the completion of the previously announced merger to form a new giant in the information industry under the name IHS Markit Ltd., as per an official statement.
The combined entity will begin trading tomorrow on the Nasdaq Global Select Market under the new trading symbol ‘INFO’, a particularly meaningful ticker that captures the core purpose of their business. Although it will be located in London, IHS Markit Ltd. will maintain “certain key operations” in IHS’s base in Colorado.
Jerre Stead, IHS chairman and CEO, will become chairman and chief executive in the combined firm until his retirement. Markit’s chief executive Lance Uggla will be president and a member of the board of directors for now, until he takes over as CEO after Stead’s departure on Dec. 31 next year.
Markit was founded in 2003 by a group of former credit derivatives traders. It floated on Nasdaq in June 2014 and its shares have risen nearly 10 per cent during its life as a public company. The London-based group provides pricing and reference data, index and valuation services and competes with Thomson Reuters and Bloomberg in providing financial data to investors.
Founded in 1959, IHS provides analytics for businesses and governments in more than 140 countries. It went public on the New York Stock Exchange in 2005 and has about 9,000 employees in 33 countries around the world.
Tax Inversion Deal
By moving to the U.K., IHS Markit is expected to have a lower corporate-tax rate in the low- to mid-20 percent range, compared with the 35% U.S. firms pay. This allows IHS to take advantage of Britain’s ever-decreasing corporate tax rate through what is known as a tax inversion, a way for U.S. companies to avoid paying taxes at home.
Commenting in the press release, Jerre Stead, CEO of IHS Markit, said: “This merger is such an important milestone for our company, colleagues, customers, shareholders and the entire business information industry.”
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“With our unique positions in energy, financial services and transportation, the sky is the limit in terms of the analytics and next generation solutions we will provide to customers worldwide and across industries, as the new global information leader,” he added.
Lance Uggla, president of IHS Markit, commented: “IHS Markit will leverage best-in-class technologies to enhance the way our customers access information, analytics and solutions. Our expertise in the industries and markets that drive the global economy will allow us to provide our customers with the tools they need to make better decisions and gain a clear competitive advantage.”
One of Equals
In accordance with the terms of the merger agreement, IHS stockholders will receive3.5566 common shares of IHS Markit in exchange for each share of IHS common stock, which will no longer be publicly traded.
On March 21, 2016, IHS and Markit first announced the signing of a definitive agreement under which the companies would combine in an all-share merger of equals.
The new entity posted a combined $3.3 billion in revenue and $1.2 billion in EBITDA, as well as $800 million in free cash flow in fiscal 2015. Furthermore, IHS and Markit said they had identified cost savings of $125 million and an annual revenue boost of $100 million within three years.
IHS Markit has more than 50,000 key business and government customers, including 80 percent of the Fortune Global 500 and the world’s leading financial institutions.
IHS Markit executive management will conduct a conference call and webcast to discuss this news release on July 13, 2016 at 8:00 a.m. Eastern Daylight Time.