NEW YORK, Feb. 28, 2022 /PRNewswire/ -- S&P Global
(NYSE: SPGI) ("S&P Global" or the "Company") and IHS Markit
earlier today announced the completion of their approximately
$140 billion1 merger,
creating a leading information services provider with a unique
portfolio of highly complementary assets. With the transaction
completed, S&P Global will offer an enhanced value proposition
for our global customer base across data & analytics, ratings,
benchmarks, indices, commodities & energy, transportation, and
engineering. These products allow us to better serve our customers
with a broader and deeper portfolio of unique solutions and
increased scale. Together, the merged company will focus on
accelerating growth and creating unparalleled value for all
stakeholders. We also completed the sale of IHS Markit's OPIS,
Coal, Metals and Mining, and PetrochemWire business to News
Corporation today.
Douglas L. Peterson,
President and Chief Executive Officer of S&P Global, said,
"Today's announcement marks the successful unification of two great
companies that will be stronger together as a combined company. Our
merger unites a unique collection of innovative assets and
technology capabilities from two world-class organizations to
benefit our people, our customers and our shareholders. Our
combined strengths in credit and risk management, indices across
multiple asset classes, private markets, ESG and energy transition
data and analytics will accelerate the growth of our business and
broaden the scope of services we can provide to the markets. I am
excited by the exceptional prospects for the future of our
Company and honored to lead our expanded organization."
S&P Global will comprise six operating divisions upon
close:
- S&P Global Market Intelligence led by
Adam Kansler
- S&P Global Ratings led by Martina Cheung
- S&P Global Commodity Insights led by
Saugata Saha
- S&P Global Mobility led by Edouard Tavernier
- S&P Dow Jones Indices led by Dan Draper
- S&P Global Engineering Solutions led by
Ewout Steenbergen (in addition to
ongoing role as CFO)
The combined company will have a strengthened financial profile,
with its divisions poised to deliver:
- 2022 guidance: The Company is initiating 2022
guidance with GAAP projected revenue growth of over 40%, margin
expansion of approximately 260 basis points, and a diluted EPS
range of $13.40 to $13.60. Adjusted projected revenue growth in the
mid-single-digits, margin expansion of approximately 130 basis
points, and an adjusted diluted EPS range of $13.30 to $13.50,
an increase of ~14% at the mid-point over the pro-forma figure for
2021 (see the Company's Current Report on Form 8K filed on
February 28, 2022 which contains
exhibits for pro forma combined operating results and related
reconciliations).
- Enhanced growth: With S&P Global's differentiated
capabilities in its core segments, as well as high-growth
adjacencies, the Company expects to realize 6.5-8.0% annual organic
revenue CAGR on average through 2023, balanced across major
industry segments.
- Increased profitability: The Company will target 200
basis points of annual EBITA margin expansion on average through
2023.
- Attractive synergies and earnings accretion post-close:
S&P Global expects the merger to be accretive to earnings by
the end of 2023. The Company expects to deliver annual cost
synergies of approximately $600
million, with ~80% of those expected in 2023, and
approximately $350 million in annual
revenue synergies for an expected total run-rate EBITA impact of
~$810 million in 2026.
- Strong balance sheet to pursue further growth: S&P
Global expects to maintain a strong balance sheet and credit
profile. The Company intends to maintain a prudent and flexible
capital structure and will target a leverage ratio of 2.0-2.5x
adjusted gross debt to adjusted EBITA.
- Improved free cash flow generation to support attractive
capital return: S&P Global expects to generate annual free
cash flow exceeding $5 billion in
2023 with a targeted dividend payout ratio of 20-30% of adjusted
diluted EPS and a targeted total capital return of at least 85% of
free cash flow between dividends and share repurchases.
In 2022, the Company intends to repurchase $12 billion of S&P Global common stock
through accelerated share repurchases (ASRs). In the coming days
the Company expects to launch an initial tranche of the ASR in the
amount of $7 billion, to be completed
in early August 2022.
The total number of shares ultimately repurchased under the
program will be determined upon final settlement and will be based
on a discount to the volume-weighted average price of S&P
Global's common stock during the ASR period. Approximately 85
percent of the shares to be repurchased under the first tranche
transaction will be received and canceled by S&P Global shortly
after the launch of the ASR.
The Board of Directors of S&P Global today approved a 10.4%
increase in the regular quarterly cash dividend on the Company's
common stock over the prior quarter. The quarterly dividend
will increase from $0.77 to
$0.85 per share in the second
quarter. The dividend of $0.85 is
payable on June 10, 2022, to
shareholders of record on May 27,
2022.
The Company plans to issue new senior notes of various
maturities, in an aggregate principal amount up to $6 billion, portions of which we expect to use to
refinance existing debt. The Company plans to bring its gross
leverage ratio in-line with the target range of 2.0x to 2.5x as a
result of these financings. The upcoming financing will include
S&P Global's inaugural sustainability-linked bond, following
its sustainability-linked revolver last year, both firsts in the
industry.
Board Appointments
As previously announced, Jacques
Esculier, Gay Huey Evans,
Robert P. Kelly and Deborah Doyle McWhinney are joining the
S&P Global Board of Directors, expanding the size of the Board
from 13 to 17. Mr. Esculier, Ms. Huey
Evans, Mr. Kelly and Ms. McWhinney each served on the IHS
Markit Board of Directors until the closing of the transaction. All
four new directors bring significant experience and valuable skills
relevant to the S&P Global business.
(1) Based on Enterprise Value
Conference Call/Webcast Details: The Company's
senior management will discuss the merger on an investor call
scheduled for March 1, 2022, at
8:00 a.m. ET. Additional
information presented on the conference call may be made available
on the Company's Investor Relations Website at
http://investor.spglobal.com.
The Webcast will be available live and in replay at
https://investor.spglobal.com/investor-presentations. (Please
copy and paste URL into Web browser.)
Telephone access is available. U.S. participants may call (888)
603-9623; international participants may call +1 (630) 395-0220
(long-distance charges will apply). The passcode is "S&P
Global" and the conference leader is Douglas Peterson. A recorded telephone replay
will be available approximately two hours after the meeting
concludes and will remain available until April 1, 2022. U.S. participants may call (866)
360-8712; international participants may call +1 (203) 369-0180
(long-distance charges will apply). No passcode is required.
Comparison of Adjusted Information to U.S. GAAP
Information: This press release includes adjusted
financial measures that are derived from the Company's continuing
operations. These non-GAAP financial measures are in addition to,
and not a substitute for or superior to, measures of financial
performance prepared in accordance with U.S. GAAP. This non-GAAP
information is provided in order to allow investors to make
meaningful comparisons of the Company's operating performance
between periods and to view the Company's business from the same
perspective as Company management.
The Company's non-GAAP measures include adjustments that reflect
how management views our businesses. The Company believes these
non-GAAP financial measures provide useful supplemental information
that, in the case of non-GAAP financial measures other than free
cash flow, enables investors to better compare the Company's
performance across periods, and management also uses these measures
internally to assess the operating performance of its business, to
assess performance for employee compensation purposes and to decide
how to allocate resources. The Company believes that the
presentation of free cash flow allows investors to evaluate the
cash generated from our underlying operations in a manner similar
to the method used by management and that such measures are useful
in evaluating the cash available to us to prepay debt, make
strategic acquisitions and investments, and repurchase stock.
However, investors should not consider any of these non-GAAP
measures in isolation from, or as a substitute for, the GAAP
financial information that the Company reports.
The Company's Current Report on Form 8-K filed on February 28, 2022 contains exhibits that
reconcile the differences between the non-GAAP measures and
comparable financial measures calculated in accordance with U.S.
GAAP. Such exhibits are available on the Company's website at
https://investor.spglobal.com/sec-filings-reports/10-qs-10-ks-other-filings/.
Reconciliations of certain forward looking non-GAAP financial
measures to comparable GAAP measures are not available due to the
challenges and impracticability with estimating some of the items.
The Company is not able to provide reconciliations of such forward
looking non-GAAP financial measures because certain items required
for such reconciliations are outside of the Company's control
and/or cannot be reasonably predicted. Because of those challenges,
reconciliations of such forward looking non-GAAP financial measures
are not available without unreasonable effort.
Forward-Looking Statements:
This press release contains "forward-looking statements," as
defined in the Private Securities Litigation Reform Act of
1995. These statements, including statements about COVID-19
and the completed merger (the "Merger") between a subsidiary of the
Company and IHS Markit Ltd. ("IHS Markit"), which express
management's current views concerning future events, trends,
contingencies or results, appear at various places in this
presentation and use words like "anticipate," "assume," "believe,"
"continue," "estimate," "expect," "forecast," "future," "intend,"
"plan," "potential," "predict," "project," "strategy," "target" and
similar terms, and future or conditional tense verbs like "could,"
"may," "might," "should," "will" and "would." For example,
management may use forward-looking statements when addressing
topics such as: the outcome of contingencies; future actions by
regulators; changes in the Company's business strategies and
methods of generating revenue; the development and performance of
the Company's services and products; the expected impact of
acquisitions and dispositions; the Company's effective tax rates;
and the Company's cost structure, dividend policy, cash flows or
liquidity.
Forward-looking statements are subject to inherent risks and
uncertainties. Factors that could cause actual results to differ
materially from those expressed or implied in forward-looking
statements include, among other things:
- worldwide economic, financial, political and regulatory
conditions, and factors that contribute to uncertainty and
volatility, natural and man-made disasters, civil unrest, pandemics
(e.g., COVID-19 and its variants), geopolitical uncertainty, and
conditions that may result from legislative, regulatory, trade and
policy changes;
- uncertainty relating to the impact of the Merger, divestitures
and liability management transactions on the business of the
Company, including potential adverse reactions or changes to the
market price of the Company's common stock resulting from the
completion of the Merger and changes to existing business
relationships and increased cyber risks that could affect the
Company's financial performance;
- the ability of the Company to successfully integrate IHS
Markit's operations and retain and hire key personnel of both
companies;
- the ability of the Company to retain customers and to implement
its plans, forecasts and other expectations with respect to IHS
Markit's business after the consummation of the Merger and realize
expected synergies;
- business disruption that could arise following the Merger;
- the Company's ability to meet expectations regarding the
accounting and tax treatments of the Merger;
- the Company's ability to successfully recover should it
experience a disaster or other business continuity problem from a
hurricane, flood, earthquake, terrorist attack, pandemic, security
breach, cyber attack, data breach, power loss, telecommunications
failure or other natural or man-made event, including the ability
to function remotely during long-term disruptions such as the
ongoing COVID-19 pandemic;
- the Company's ability to maintain adequate physical, technical
and administrative safeguards to protect the security of
confidential information and data, and the potential for a system
or network disruption that results in regulatory penalties and
remedial costs or improper disclosure of confidential information
or data;
- the outcome of litigation, government and regulatory
proceedings, investigations and inquiries;
- the health of debt and equity markets, including credit quality
and spreads, the level of liquidity and future debt issuances,
demand for investment products that track indices and assessments
and trading volumes of certain exchange traded derivatives;
- the demand and market for credit ratings in and across the
sectors and geographies where the Company operates;
- concerns in the marketplace affecting the Company's credibility
or otherwise affecting market perceptions of the integrity or
utility of independent credit ratings, benchmarks and indices;
- the effect of competitive products and pricing, including the
level of success of new product developments and global
expansion;
- the Company's exposure to potential criminal sanctions or civil
penalties for noncompliance with foreign and U.S. laws and
regulations that are applicable in the domestic and international
jurisdictions in which it operates, including sanctions laws
relating to countries such as Iran, Russia,
Sudan, Syria and Venezuela, anti-corruption laws such as the
U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act of
2010, and local laws prohibiting corrupt payments to government
officials, as well as import and export restrictions;
- the continuously evolving regulatory environment, in
Europe, the United States and elsewhere around the
globe, affecting S&P Global Market Intelligence, S&P Global
Ratings, S&P Global Commodity Insights, S&P Global
Mobility, S&P Dow Jones Indices, S&P Global Engineering
Solutions and the products those business divisions offer including
our ESG products, and the Company's compliance therewith;
- the Company's ability to make acquisitions and dispositions and
successfully integrate the businesses we acquire;
- consolidation in the Company's end-customer markets;
- the introduction of competing products or technologies by other
companies;
- the impact of customer cost-cutting pressures, including in the
financial services industry and the commodities markets;
- a decline in the demand for credit risk management tools by
financial institutions;
- the level of merger and acquisition activity in the United States and abroad;
- the volatility and health of the energy and commodities
markets;
- our ability to attract, incentivize and retain key employees,
especially in today's competitive business environment;
- the level of the Company's future cash flows and capital
investments;
- the impact on the Company's revenue and net income caused by
fluctuations in foreign currency exchange rates;
- the Company's ability to adjust to changes in European and
United Kingdom markets following
the United Kingdom's departure
from the European Union, and the impact of such departure on our
credit rating activities and other offerings in the European Union
and United Kingdom; and
- the impact of changes in applicable tax or accounting
requirements on the Company.
The factors noted above are not exhaustive. The Company and its
subsidiaries operate in a dynamic business environment in which new
risks emerge frequently. Accordingly, the Company cautions readers
not to place undue reliance on any forward-looking statements,
which speak only as of the dates on which they are made. The
Company undertakes no obligation to update or revise any
forward-looking statement to reflect events or circumstances
arising after the date on which it is made, except as required by
applicable law. Further information about the Company's businesses,
including information about factors that could materially affect
its results of operations and financial condition, is contained in
the Company's filings with the SEC, including Item 1A, Risk
Factors, in our most recently filed Annual Report on Form 10-K.
About S&P Global
S&P Global (NYSE: SPGI) provides essential intelligence. We
enable governments, businesses and individuals with the right data,
expertise and connected technology so that they can make decisions
with conviction. From helping our customers assess new investments
to guiding them through ESG and energy transition across supply
chains, we unlock new opportunities, solve challenges and
accelerate progress for the world.
We are widely sought after by many of the world's leading
organizations to provide credit ratings, benchmarks, analytics and
workflow solutions in the global capital, commodity and automotive
markets. With every one of our offerings, we help the world's
leading organizations plan for tomorrow, today. For more
information, visit www.spglobal.com.
Investor Relations:
Mark Grant
Tel: +1 347 640 1521
mark.grant@spglobal.com
Media:
Ola Fadahunsi
Tel: +1 212 438 2296
ola.fadahunsi@spglobal.com
Christopher Krantz
+44 (0) 20 7176 0060
christopher.krantz@spglobal.com
View original
content:https://www.prnewswire.com/news-releases/sp-global-completes-merger-with-ihs-markit-creating-a-global-leader-to-power-the-markets-of-the-future-301492031.html
SOURCE S&P Global