Two well-known names in the information and analytics world announced an all-stock merger Monday morning. IHS Inc. (NYSE: IHS) and Markit Ltd. (NASDAQ: MRKT) will combine to form a company with a market cap of around $13 billion, based on Friday’s closing share prices.
The merged firm will be called IHS Markit and be headquartered in London, while maintaining some operations in Englewood, Colo. IHS shareholders will receive 3.5566 common shares of IHS Markit for each share of IHS common stock, a transaction determined by the IHS closing price of $110.71 on March 18. The transaction price implies a per-share price of Markit common shares of $31.13, a premium of about 5.5% to Markit’s closing price on Friday. IHS shareholders will own approximately 57% of the combined company and Markit shareholders will own the rest.
Chairman and chief executive officer of IHS, Jerre Stead, said:
This transformational merger brings together two information-rich companies to create a powerful provider of unique business intelligence, data and analytics to a broad and complementary customer base. IHS Markit and its shareholders will benefit from enhanced product innovation to deliver strong returns across economic cycles. Importantly, the two companies are values-based organizations that have a strong cultural fit which focuses on customer satisfaction and colleague success.
Following the merger, Stead will be chairman and CEO of the new company. Markit’s current chairman and CEO Lance Uggla will be president and a member of the new company’s board of directors. Uggla will become chairman and CEO of the company in December of 2017 when Stead retires.
The transaction is expected to close in the second half of 2016 and requires approval by shareholders of both companies. The transaction is fully taxable for IHS U.S. shareholders.
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