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| IHS to buy data provider Markit | IHS to buy data provider Markit |
| (about 1 hour later) | |
| The US business research provider IHS has agreed to buy Markit to create a $13bn London-based data and business research provider. | |
| The deal is in the latest example of a US company moving its headquarters overseas where corporate tax rates are lower. | |
| IHS shareholders will own about 57% of the combined company, which would have a total value of more than $13bn, while Markit shareholders will own the rest. | IHS shareholders will own about 57% of the combined company, which would have a total value of more than $13bn, while Markit shareholders will own the rest. |
| IHS, whose businesses include Jane’s Defence Weekly and the technology research company iSuppli, will pay the equivalent of $31.13 per Markit share, a premium of 5.6% to Markit’s Friday close. | IHS, whose businesses include Jane’s Defence Weekly and the technology research company iSuppli, will pay the equivalent of $31.13 per Markit share, a premium of 5.6% to Markit’s Friday close. |
| Related: Pound falls after IDS quits; Chinese market hits two-month high - business live | Related: Pound falls after IDS quits; Chinese market hits two-month high - business live |
| Markit’s shares were up 6.8% at $31.50 in premarket trading on Monday. The shares have risen about 23% since the company went public in June 2014. IHS’s shares, which hit a three-year low of $92.90 last month, were up 3.9% at $115. | |
| IHS said the combined company was expected to have a tax rate in the low- to mid-20% range. IHS’s tax rate for the year ended 30 November was 20.5%, while Markit paid taxes at the rate of 31.5% for the year ended 31 December. | |
| So-called “tax inversion” deals have become the subject of a fierce political debate in the United States as well as a source of concern for the government over the potential loss of tax revenue. | |
| Markit, founded in 2003 by ex-TD Securities credit trader Lance Uggla in a barn north of London, provides pricing and reference data, index and valuation services. | |
| IHS chief executive Jerre Stead will become chairman and chief executive of the combined company, IHS Markit. Uggla will be president for now and take over the top job after Stead’s retirement on 31 December next year. | |
| IHS, which has been on an acquisition spree, said its shareholders would get 3.5566 common shares of the combined company, IHS Markit, for each share held. | IHS, which has been on an acquisition spree, said its shareholders would get 3.5566 common shares of the combined company, IHS Markit, for each share held. |
| Markit’s top shareholders include the US equity company General Atlantic, the Singapore state investor Temasek Holdings and Canada Pension Plan Investment Board. | Markit’s top shareholders include the US equity company General Atlantic, the Singapore state investor Temasek Holdings and Canada Pension Plan Investment Board. |
| IHS’s energy business, its biggest division, provides research on energy and chemicals, including global well, production and field information to oil and gas companies. | IHS’s energy business, its biggest division, provides research on energy and chemicals, including global well, production and field information to oil and gas companies. |
| However, revenue in the business has been falling as clients slash spending in response to lower oil prices. Revenue in the division fell almost 1% to $215.9m in the first quarter to 29 February. | However, revenue in the business has been falling as clients slash spending in response to lower oil prices. Revenue in the division fell almost 1% to $215.9m in the first quarter to 29 February. |
| Stronger than expected total revenue in the quarter was helped by a jump in non-subscription revenue, which includes organising industry events. | Stronger than expected total revenue in the quarter was helped by a jump in non-subscription revenue, which includes organising industry events. |
| IHS said in January it would buy US-based Oil Price Information Service (OPIS) to add real-time pricing information to its energy analytics business. | IHS said in January it would buy US-based Oil Price Information Service (OPIS) to add real-time pricing information to its energy analytics business. |
| The company agreed in December to buy Canada-based vehicle data provider Carproof Corp for $460m to boost its automotive research business. IHS, however, abandoned its buyout of software maker Solera Holdings in September. | The company agreed in December to buy Canada-based vehicle data provider Carproof Corp for $460m to boost its automotive research business. IHS, however, abandoned its buyout of software maker Solera Holdings in September. |
| IHS Markit, while headquartered in London, will have certain key operations in Colorado. | |
| IHS competes with Thomson Reuters and Bloomberg in providing financial data to investors. | IHS competes with Thomson Reuters and Bloomberg in providing financial data to investors. |