IHS IHS Holding Limited

Financial-data provider Markit Ltd. posted revenue gains in its latest quarter, but profit fell as the U.K.-based company prepares to merge with U.S. information and analytics provider IHS Inc.

The companies announced the deal in April, valuing Markit at about $5.8 billion, or $31.13 a share. By moving to the U.K., IHS will be able to take advantage of the country's lower corporate-tax rate through what is known as a tax inversion, a way for U.S. companies to avoid paying taxes at home. The new company is to be called IHS Markit.

Tuesday, Markit said the deal was still on track to close in the second half of the year. In April, the U.S. Treasury Department issued new rules designed to stymie such tax-lowering deals, resulting in Pfizer Inc. and Ireland-based Allergan PLC canceling their planned $150 billion merger.

London-based Markit feeds data about derivatives, currencies, loans and other products, and provides services such as software, instant messaging, and trading links to big banks and other financial institutions. Markit went public in 2014, raising $1.3 billion with shares priced at $24.

Markit said acquisitions contributed $18.4 million, or 6.8%, to revenue growth in the quarter. Last year, Markit bought DealHub, a provider of trade processing to the foreign-exchange market, and Information Mosaic, a software provider for post trade processing. In March, Markit said it acquired the credit default swap pricing service of Fitch Solutions.

Markit's revenue grew 1.0% on an organic basis, which strips out the impact of acquisitions and currency swings.

Overall for the quarter ended March 31, Markit reported a profit of $24.7 million, or 13 cents a share, down from $54.5 million, or 29 cents a share a year prior. Excluding charges and other special items, earnings were 35 cents a share, down a penny from the previous year.

Revenue grew 6% to $287.8 million.

Analysts surveyed by Thomson Reuters expected 36 cents a share in earnings on $294 million in revenue.

Share-based compensation jumped to $24.1 million from $9.9 million previously.

Markit's information-services unit, which accounts for 45% of the company's top line, logged a 4.9% increase in organic revenue on new business and increased customer assets under management in products benchmarked to Markit's indexes.

Its solutions division, the unit offering systems and software, posted a 4% organic revenue increase on new business in its managed services division, partially offset by lower relative growth rates in loan assets under management.

Its trade-processing division reported a 9.6% decline in organic revenue, hurt by price reductions in its derivatives business and lower volumes in credit and rates asset classes.

Shares, inactive premarket, have risen 27% over the past three months.

Write to Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

May 10, 2016 08:55 ET (12:55 GMT)

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