Leading Data and Analytics Provider for Energy
and Commodities Markets Will Provide New Pillars of Growth for Dow
Jones
Growing, High Margin, Subscription-Based
Business Expected To Transform the Dow Jones Professional
Information Business
News Corp announced today that it has entered into an agreement
to acquire the Oil Price Information Service (OPIS) and related
assets from S&P Global and IHS Markit.
The scaled, highly profitable and consistently growing digital
data, analytics and insights provider will become part of Dow
Jones’ burgeoning Professional Information Business (PIB), which
includes Dow Jones Risk & Compliance, Dow Jones Newswires and
Factiva. OPIS has a revenue base that is nearly 100% digital, 95%
recurring and operates at approximately 50+% Adjusted EBITDA
margins1, with modest Capex requirements.
News Corp is acquiring OPIS for $1.150 billion in a cash
transaction, subject to customary adjustments, and also expects to
receive an estimated tax benefit of $180 million as part of the
transaction2. S&P Global and IHS Markit announced in May their
exploration of the divestiture of the businesses to ensure a timely
merger of both companies. News Corp’s acquisition of OPIS is
subject to customary closing conditions, including regulatory
approvals and the consummation of the S&P Global and IHS Markit
merger, which is expected in the fourth quarter of this calendar
year.
Founded in 1977, OPIS today is a global industry standard for
benchmark and reference pricing and news and analytics for the oil,
natural gas liquids and biofuels industries, and a growing provider
of insights and analytics in renewables and carbon pricing. At its
core, OPIS provides end-to-end pricing and analytics information to
the energy industry from the refinery to the retailer.
With this acquisition, Dow Jones will also be providing pricing
and news and analytics for the Coal, Mining and Metals end markets
through McCloskey, among other brands. In addition, Dow Jones will
be well poised to leverage the global transition to renewables and
the growth opportunities resulting from emerging energy categories
like hydrogen, carbon credits, biofuels, LNG, solar, water and
electric vehicles.
OPIS will also help Dow Jones in its goal of building the
leading global business news and information platform for
professionals. With its valuable data, which is used as a currency
for the industry, OPIS has deep and trusted customer relationships
with high renewal rates, and a seasoned management team with an
average of 18 years of experience.
“OPIS will be the cornerstone for a rising commodities, energy
and renewables digital business that we are convinced will have a
positive impact on Dow Jones and News Corp,” said Robert Thomson,
Chief Executive of News Corp. “We certainly believe OPIS and Dow
Jones will be more than the sum of their valuable parts. Dow Jones
is ideally positioned to accelerate growth at OPIS, while OPIS will
be a powerful pillar, alongside Risk & Compliance, in the
fast-growing Dow Jones Professional Information Business.”
OPIS and related assets revenues have grown at an approximate
10% CAGR, including acquisitions, since 2016, as disclosed by IHS
Markit, and grew at a consistent rate through the 2008-2009 global
financial crisis, the 2014-2015 oil market downturn and the current
pandemic. In its current fiscal year (ending November 30, 2021),
OPIS is expected to generate approximately $129 million in
revenues, with Adjusted EBITDA growing at a faster rate, and
expected Adjusted EBITDA margins exceeding 50%.
The energy and commodity pricing information industry is
estimated to be at $3 billion as of 2020 (source: Burton-Taylor),
with a 5-year CAGR of more than 7%. Given the large scale and
global corporate and societal response to climate change, the
fast-growing renewable energy markets have rising demand for the
kind of data and analytics Dow Jones will be able to supply with
OPIS. OPIS’ retail offerings have the ability to grow outside the
US and in segments like connected cars and electric vehicles.
“Dow Jones and OPIS together can be a leading provider of energy
and renewable information, combining trusted news, data, analytics,
events and an interconnected professional community,” said Almar
Latour, CEO of Dow Jones. “OPIS’s expertise in commodities, energy
and renewables aligns with Dow Jones’ focus on building deeper
specialization in specific verticals around valuable content. OPIS
is expected to accelerate PIB’s growth by adding a highly
profitable, growing business that can expand even faster as part of
Dow Jones.”
OPIS, headquartered in Rockville, Maryland, also has offices in
Mexico, the United Kingdom, France, Romania and Singapore. The
company employs approximately 400 professionals globally.
News Corp will report its full year 2021 results on August 5,
2021. As of the Third Quarter year to date, Dow Jones revenues
increased 4 percent while Segment EBITDA expanded 49 percent, on
21% Segment EBITDA margins, and achieved record profitability.
###
1 Adjusted EBITDA margin is the ratio of
Adjusted EBITDA to revenues. In its fiscal year ended November 30,
2020, OPIS generated revenue and Adjusted EBITDA of approximately
$121 million and $61 million, respectively. Adjusted EBITDA
excludes corporate allocations of $11 million from EBITDA. EBITDA
for the OPIS business excludes depreciation expense of $2.8
million, restructuring and other expense, net of $4.5 million and
equity losses from investees of $0.2 million from net income of
$42.1 million. All figures based on information provided by IHS
Markit Ltd.
2 News Corp expects to receive a step up
in tax basis resulting in an annual deduction over the next 15
years with an estimated tax benefit of $180 million on a present
value basis.
Forward-Looking Statements
This release contains forward-looking statements based on
current expectations or beliefs, as well as assumptions about
future events, and these statements are subject to factors and
uncertainties that could cause actual results to differ materially
from those described in the forward-looking statements. The words
“expect,” "will," “estimate,” “anticipate,” “predict,” “believe,”
“potential” and similar expressions and variations thereof are
intended to identify forward-looking statements. These statements
appear in a number of places in this release and include statements
with respect to, among other things, the expected timing for the
completion of, and the potential benefits from, the acquisition of
OPIS. Readers are cautioned that any forward-looking statements are
not guarantees of future performance and involve risks and
uncertainties. Many factors, such as the risks and uncertainties
related to the parties’ efforts to comply with and satisfy
applicable regulatory approvals and closing conditions relating to
the acquisition, could cause actual results to differ materially
from those described in these forward-looking statements. The
forward-looking statements in this release speak only as of this
date and News Corp and Dow Jones undertake no obligation (and
expressly disclaim any obligation) to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
About News Corp
News Corp (Nasdaq: NWS, NWSA; ASX: NWS, NWSLV) is a global,
diversified media and information services company focused on
creating and distributing authoritative and engaging content and
other products and services. The company comprises businesses
across a range of media, including: digital real estate services,
subscription video services in Australia, news and information
services and book publishing. Headquartered in New York, News Corp
operates primarily in the United States, Australia, and the United
Kingdom, and its content and other products and services are
distributed and consumed worldwide. More information is available
at: http://www.newscorp.com.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210802005338/en/
News Corp Investor Relations Michael Florin 212-416-3363
mflorin@newscorp.com
News Corp Corporate Communications Jim Kennedy 212-416-4064
jkennedy@newscorp.com
Dow Jones Corporate Communications Matthew Hutchison
+1415-583-2119 Matthew.hutchison@dowjones.com
News (NASDAQ:NWSA)
Historical Stock Chart
From Dec 2024 to Jan 2025
News (NASDAQ:NWSA)
Historical Stock Chart
From Jan 2024 to Jan 2025
