Mining data provider SNL acquired by McGraw Hill for $2.2 billion
Yesterday McGraw Hill emerged as the victor amongst a suite of suitors seeking to acquire SNL Financial.
McGraw paid about $2.225 billion in cash for the company. Wall Street Journal says other companies were vying for the data provider.
SNL Financial was privately held by the private-equity firm New Mountain Capital LLC,, which purchased a 60% stake four years ago. SNL was founded in 1987 and has about 3,000 employees.
In 2012 SNL acquired Nova Scotia-based Metals Economics Group.
MNING.com is a division of InfoMine, which offers its own mining intelligence service.
News release below:
NEW YORK, July 27, 2015 /PRNewswire/ — McGraw Hill Financial (NYSE: MHFI) today announced that it has signed a definitive agreement to acquire SNL Financial for approximately $2.225 billion in cash. The economic impact to McGraw Hill Financial will be partially offset by tax benefits with an estimated present value of approximately $550 million resulting from the transaction. SNL is privately held by an affiliate of New Mountain Capital LLC and current and former members of SNL management.
SNL's deep product experience and rich sets of data, analytics and research in areas such as real estate and media strongly complement S&P Capital IQ's platform in the areas of banking and insurance. SNL also adds new analytics and capabilities that expand the Platts platform across energy markets.
"We are enthusiastic about SNL because it is a fast-growing, highly complementary subscription-based business that will enable us to accelerate our strategy to be the leading provider of transparent and independent benchmarks, analytics, data and research across the global capital, commodity and corporate markets," said Douglas L. Peterson, President and CEO of McGraw Hill Financial. "This transaction provides unique opportunities to provide our customers with end-to-end data solutions and to develop exciting new services, enhance existing offerings and expand into attractive adjacent markets. Adding SNL to our portfolio creates a high-growth market data and analytics business that will leverage the power of the S&P Capital IQ and Platts global platforms to realize the full potential of SNL's financial and commodities products."
Excluding amortization, the transaction is expected to be accretive to adjusted diluted EPS in 2016, and, on a GAAP basis, in 2018. The Company has also identified approximately $70 million in synergies which are expected to be fully realized by 2019 largely from operational efficiencies and McGraw Hill Financial's ability to accelerate SNL's international growth through its global footprint.
Mr. Peterson added, "SNL has a stellar management team that has sustained an impressive organic growth rate in the low to mid-teens for more than a decade and which has recently completed a strategic investment program designed to enhance profitability. This acquisition provides an excellent opportunity to use our balance sheet to accelerate growth while preserving our investment-grade credit rating and the financial flexibility to continue making investments in our business while returning capital to shareholders."
"This is an exciting day for our clients, employees and shareholders and a true milestone event in our 28 year history," said Mike Chinn, President and CEO of SNL Financial. "New Mountain Capital has been a tremendous partner for us over the last four years. The team there provided excellent guidance and supported numerous growth initiatives that enabled us to double our revenues over that period. We believe McGraw Hill Financial, Doug Peterson and his leadership team are ideal partners as we relentlessly pursue our mission of providing the highest quality sector-specific data, news and analytics to our clients. We're thrilled to continue this journey with the McGraw Hill Financial team and join their portfolio of market-leading brands."
Following the closing of the transaction, Mr. Chinn will report to Mr. Peterson.
Peter Masucci, Chairman of the Board of SNL Financial and Managing Director of New Mountain Capital, stated, "We're fortunate to have the opportunity to partner with such a special company and its outstanding management team. We are confident that SNL is well-positioned to continue its strong growth as an integral part of McGraw Hill Financial and wish Mike Chinn, Doug Peterson, and their management teams great success."
Financing and Closing Conditions
McGraw Hill Financial is expected to fund the transaction with approximately $525 million in cash and $1.7 billion in new debt.
The transaction is expected to close in the third quarter of 2015, subject to regulatory approvals and customary closing conditions.
Evercore and Goldman Sachs acted as financial advisors and Wachtell, Lipton, Rosen & Katz and Clifford Chance LLP acted as legal advisors to McGraw Hill Financial.
About SNL Financial:
Headquartered in Charlottesville, VA, SNL has approximately 3,000 employees based in 10 countries. SNL, founded in 1987, has more than 5,000 customers with deep relationships across banks, insurance companies, corporations, asset managers, power companies and other users. SNL's areas of coverage include:
- Financial institutions: asset and branch-level analytics; financial, industry, demographic, employment, trade area, and branch data; and global bank and insurance company news;
- Real estate: data on 500+ global REITs, nearly 500 global property companies, and more than 100,000 unique properties and development projects;
- Energy: financial coverage of 225+ public companies; industry forecasts; operational stats for nearly 5,000 electric utilities, natural gas companies, and coal producers; data on interstate pipelines, new power projects and mines, and energy-related emissions;
- Media: hundreds of listed companies, US and European TV networks, global databases including detailed pay TV subscriber information and programming history, and extensive radio coverage;
- Metals and mining: data on more than 60 countries, 300,000+ drill results, nearly 40,000 properties and nearly 3,000 active companies.
About New Mountain:
New Mountain Capital is a New York-based private equity firm that emphasizes business building and growth, rather than debt, as it pursues long-term capital appreciation. The firm currently manages private equity, public equity, and credit funds with over $15 billion in aggregate capital commitments. New Mountain seeks out what it believes to be the highest quality growth leaders in carefully selected industry sectors and then works intensively with management to build the value of these companies. For more information on New Mountain Capital, please visit www.newmountaincapital.com.
About McGraw Hill Financial:
McGraw Hill Financial is a leading financial intelligence company providing the global capital and commodity markets with independent benchmarks, credit ratings, portfolio and enterprise risk solutions, and analytics. The Company's iconic brands include Standard & Poor's Ratings Services, S&P Capital IQ, S&P Dow Jones Indices, Platts, CRISIL, and J.D. Power. The Company has approximately 17,000 employees in 30 countries. Additional information is available at www.mhfi.com.
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