Get 40% Off
👀 👁 🧿 All eyes on Biogen, up +4,56% after posting earnings. Our AI picked it in March 2024.
Which stocks will surge next?
Unlock AI-picked Stocks

McGraw Hill Financial to buy SNL Financial for $2.23 billion

Published 07/27/2015, 05:36 PM
Updated 07/27/2015, 05:36 PM
© Reuters. A U.S. flag is reflected in a window of the Standard and Poor's building in New York

(Reuters) - McGraw Hill Financial Inc (N:MHFI), parent of Standard & Poor's ratings agency, said it would buy data company SNL Financial for about $2.23 billion, and its shares fell nearly 6 percent.

McGraw Hill, which also reported a higher-than-expected second-quarter profit on Monday, said the deal would strengthen its S&P Capital IQ data analytics unit, particularly in providing information on banking and insurance.

However, UBS analysts wrote in a note that investors might not have hoped for a major acquisition for Capital IQ, "as opposed to higher-margin and lower-competition areas such as rating and indices."

McGraw Hill's rating and index units have accounted for the majority of earnings in the past few quarters.

The company maintained its full-year earnings forecast of between $4.35 and $4.45 per share, excluding special items, despite expectations that the deal would reduce profit by 5 cents to 7 cents.

Tax benefits of about $550 million will mitigate the financial impact of the acquisition, the company said in a statement.

New York-based McGraw Hill said it expected the deal to add to diluted earnings per share in 2016, excluding amortization and special items.

SNL Financial, owned by private equity firm New Mountain Capital LLC, has about 3,000 employees in 10 countries.

In the second quarter, McGraw Hill's earnings per share from continuing operations jumped 17 percent to $1.21, excluding gains from legal settlements and the sale of a construction business asset.

Analysts on average had expected $1.13 a share, according to Thomson Reuters I/B/E/S.

Revenue fell 1 percent at Standard & Poor's Ratings Services, the company's biggest unit, but rose 11 percent at S&P Dow Jones Indices.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

S&P Capital IQ revenue rose 6 percent to $324 million.

Total revenue rose 3 percent to $1.34 billion.

McGraw Hill shares fell 5.6 percent to close at $99.59 on the New York Stock Exchange.

Rival Moody's Corp (N:MCO) reported a higher-than-expected quarterly profit on Friday, benefiting from strong growth in its analytics business.

Thomson Reuters Corp (TO:TRI) competes with McGraw Hill in providing information on financial and commodities markets.

Evercore Partners Inc (N:EVR) and Goldman Sachs Group Inc (N:GS) acted as financial advisors and Wachtell, Lipton, Rosen & Katz and Clifford Chance LLP were legal advisors to McGraw Hill Financial. SNL Financial received legal counsel from Fried, Frank, Harris, Shriver & Jacobson LLP.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.