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Teresa Chick
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Back to all IHS Markit announcements

IHS and Markit to Merge, Creating a Global Leader in Critical Information, Analytics and Solutions

  • Combined company creates a global information powerhouse with leading positions in energy, financial services and transportation, serving a world-leading customer base with the opportunity to deliver a broader set of next-generation solutions across industries
  • Immediately accretive to combined adjusted earnings; expected combined free cash flow of more than $900 million in 2017
  • Significant value creation through clearly identified cost synergies of $125 million and revenue opportunities of $100 million
  • $1 billion share repurchase program in each of 2017 and 2018
IHS (NYSE: IHS) and Markit (NASDAQ: MRKT) today announced the signing of a definitive agreement under which the companies will combine in an all-share merger of equals to create a global leader in critical information, analytics and solutions. Based on the closing prices of IHS and Markit common stock on March 18, 2016, the implied equity value of the transaction is more than $13 billion. The transaction has been unanimously approved by the Board of Directors of each company.

Upon completion of the merger, the combined company will be renamed IHS Markit and will be headquartered in London and have certain key operations based in Englewood, Colorado. IHS shareholders will own approximately 57 percent and Markit shareholders will own approximately 43 percent of the combined company on a fully diluted basis. IHS shareholders will receive 3.5566 common shares of IHS Markit for each share of IHS common stock, which based upon the IHS closing price of $110.71 on March 18, 2016, implies a per share price of Markit common shares of $31.13.

IHS Markit will be a leader in critical information, analytics and solutions, and will have non-overlapping customers and products, a strong financial profile and a world-class management team. The company will also deliver next-generation information and analytics products to help customers improve decision making. IHS Markit will have more than 50,000 key customers, including 75 percent of the Fortune Global 500, creating significant cross-selling opportunities across multiple commercial industries and governments.

The combined company’s reported results for fiscal year 2015 include approximately: $3.3 billion in revenue, $1.2 billion in adjusted earnings before interest, taxes depreciation and amortization (EBITDA), and $800 million in free cash flow.

Jerre Stead, IHS Chairman and Chief Executive Officer, 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.”

Lance Uggla, Chairman and Chief Executive Officer of Markit, said, “This is an exciting transaction for customers, employees and shareholders of IHS and Markit. Together, we will create a global information powerhouse and a platform for innovation that drives future revenue. At the heart of our shared vision is the opportunity to offer our customers a broader and richer content set through both existing and new products that will support their critical decision making and manage regulatory change. The combination will enhance cash flow and enable stronger returns of capital to shareholders.”

Compelling Strategic and Financial Rationale

  • Creates a global information platform across industries with leading positions in energy, financial services and transportation.The combined company will create a platform for innovation and new product development to drive future revenue growth.
  • Combination of commercial, operational and structural synergies will result in approximately 20 percent adjusted diluted EPS growth in 2017. The transaction is expected to be immediately accretive to adjusted diluted EPS, with mid-teens accretion in 2018. The new company expects to realize cost synergies of $125 million by year-end 2019. Cost synergies are expected to be driven by integrating corporate functions, reducing technology spend by optimizing IT infrastructure, using centers of excellence in cost-competitive locations, and optimizing real estate and other costs. IHS Markit anticipates an adjusted effective tax rate in the low- to mid-20 percent range.
  • Strong balance sheet with financial flexibility and meaningful capital returns. IHS Markit will have a capital policy with a target leverage ratio of 2.0 to 3.0 times. The new company will execute $1 billion of share repurchases in each of 2017 and 2018.
  • High recurring revenue generation drives new product investments. IHS Markit anticipates the combination will deliver approximately $100 million of run rate revenue opportunities by fiscal year 2019. IHS Markit’s subscription-based model will generate approximately 85 percent in recurring revenues, providing predictability and stability.
  • Complementary and broad customer base leads to the opportunity to cross sell. IHS and Markit have deep, non-overlapping senior relationships across corporate, government, financial services and consumer customers. There will be significant opportunities to offer a more diverse product set to a broader combined customer base.
  • World-class management team with track record of driving value creation through successful M&A integration. IHS and Markit each have a proven track record in mergers and acquisitions and integration and have started developing plans to ensure seamless integration of the two companies.


The combination will be a merger of equals. Mr. Stead will assume the role of Chairman of the Board of Directors and Chief Executive Officer of IHS Markit. Mr. Uggla will be President and a member of the Board of Directors.

Mr. Uggla will assume the role of Chairman of the Board of Directors and Chief Executive Officer of IHS Markit upon Mr. Stead’s retirement on December 31, 2017.

The Board of Directors of the combined company will be comprised of 11 members, with IHS designating six members (including the chairman) and Markit designating five members (including the lead director) from their current boards.

Transaction Details

  • Headquarters: IHS Markit will be headquartered in London and have certain key operations based in Englewood, Colorado.
  • Closing and Approvals: The transaction is expected to close in the second half of 2016, subject to customary closing conditions, including regulatory approvals and approval by both IHS and Markit shareholders. This will be a fully taxable transaction for IHS U.S. shareholders which will allow the ability to offset capital losses against capital gains.
  • Advisors: IHS legal advisor is Weil, Gotshal & Manges LLP and its lead financial advisor is M. Klein and Company and its other financial advisor is Goldman, Sachs & Co. Markit’s legal advisor is Davis Polk & Wardwell LLP and its financial advisor is J.P. Morgan Securities LLC.

A copy of the investor presentation will be made available on both companies’ investor relations websites.

IHS (NYSE: IHS) is the leading source of insight, analytics and expertise in critical areas that shape today’s business landscape. Businesses and governments in more than 140 countries around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS is committed to sustainable, profitable growth and employs nearly 9,000 people in 32 countries around the world.

Markit is a leading global provider of financial information services. We provide products that enhance transparency, reduce risk and improve operational efficiency. Our customers include banks, hedge funds, asset managers, central banks, regulators, auditors, fund administrators and insurance companies. Founded in 2003, we employ over 4,200 people in 13 countries. Markit shares are listed on NASDAQ under the symbol MRKT. 

IHS, Markit, and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding IHS’s directors and executive officers, and their direct or indirect interests in the transaction, by security holdings or otherwise, is contained in IHS’s Form 10-K for the year ended November 30, 2015, and its proxy statement filed on February 24, 2016, which are filed with the SEC. Information regarding the directors and executive officers of Markit, and their direct or indirect interests in the transaction, by security holdings or otherwise, is contained in Markit’s 20-F for the year ended December 31, 2015, and Markit’s proxy statement filed on Form 6-K on March 27, 2015, which are filed with the SEC. A more complete description will be available in the registration statement on Form F-4 and the joint proxy statement/prospectus.

Adjusted EBITDA for IHS

Adjusted EBITDA is equal to EBITDA, which is defined as net income plus or minus net interest, plus provision for income taxes, depreciation, and amortization, and further excludes primarily non-cash items and other items that we do not consider to be useful in assessing our operating performance (e.g., stock-based compensation expense, restructuring charges, acquisition-related costs, asset impairment charges, gain or loss on sale of assets, gain or loss on debt extinguishment, pension mark-to-market and settlement expense, and income or loss from discontinued operations).

The following table reconciles IHS profit for the period from continuing operations to our Adjusted EBITDA for the periods presented:

Net income           240,193
Interest income           (933)
Interest expense           70,985
Provision for income taxes           48,853
Depreciation           84,958
Amortization related to acquired intangible assets           130,122
Stock-based compensation expense           128,916
Restructuring charges           39,359
Acquisition-related costs           1,472
Impairment of assets           1,243
Loss on sale of assets           -
Loss on debt extinguishment           -
Pension mark-to-market and settlement expense           2,492
Income from discontinued operations, net           (51,255)
Adjusted EBITDA           696,405

Adjusted EBITDA for Markit

Adjusted EBITDA is defined as profit for the period from continuing operations before income taxes, net finance costs, depreciation and amortisation on fixed assets and intangible assets (including acquisition related intangible assets), acquisition related items, exceptional items, share based compensation and related items, net other gains or losses, including Adjusted EBITDA attributable to joint ventures and excluding Adjusted EBITDA attributable to non-controlling interests.

The following table reconciles Markit’s profit for the period from continuing operations to our Adjusted EBITDA for the period presented:

($ in millions)          

For the year ended

December 31, 2015

Profit for the period           152.1
Income tax expense           70.0
Finance costs – net           18.9
Depreciation and amortisation – other           107.0
Amortisation – acquisition related           63.7
Acquisition related items           4.2
Exceptional items           48.7
Share based compensation and related items           50.8
Other (gains) / losses – net           (13.7)
Share of results from joint venture not attributable to Adjusted EBITDA           (2.4)
Adjusted EBITDA attributable to non-controlling interests           (2.4)
Adjusted EBITDA           496.9

Free Cash Flow for IHS

Free cash flow is defined as net cash provided by operating activities less capital expenditures.

The following table reconciles IHS net cash generated by or used in operating activities to free cash flow.

Net cash generated by operating activities           612.6
Capital expenditures on property and equipment           (122.9)
Free cash flow           489.7

Free Cash Flow for Markit

Free cash flow is defined as net cash generated by or used in operating activities, less capital expenditure, purchases of property, plant and equipment and intangible assets. The following table reconciles Markit's net cash generated by or used in operating activities to free cash flow.

Net cash generated by operating activities           405.6  

Purchases of property, plant and equipment




Purchases of intangible assets           (100.5 )
Free cash flow           288.5