Global data analytics provider Verisk has announced plans to sell its energy business, Wood Mackenzie, to Veritas Capital for $3.1 billion as it continues to shift its focus towards becoming a pure-play re/insurance business.
Having joined Verisk in 2015, Wood Mackenzie provides data, analytics, and insights to support the energy, renewables, and natural resources industry.
Veritas, which is an investor at the intersection of technology and government, will provide the $3.1 billion purchase price as a cash consideration payable at closing plus future additional contingent consideration of up to $200 million.
“This transaction best positions Verisk to expand our role as a strategic data, analytics, and technology partner to the global insurance industry, and as a result, drive growth and returns that will create long-term shareholder value,” explained Verisk CEO Lee Shavel.
“It will also further advance Wood Mackenzie’s competitive position and support the vital roles both organizations play in their respective industries,” he continued.
“As co-presidents of Wood Mackenzie, Mark Brinin and Joe Levesque have demonstrated remarkable leadership and have continued to grow the business by relentlessly innovating on behalf of their clients. We’re proud to have supported Wood Mackenzie’s growth and are confident in their bright future as part of Veritas.”
Verisk responded to demands from activist investors earlier this year by agreeing to reposition itself as a pure-play re/insurance focused business and to seek further margin expansion, while also nominating three new independent directors for election to its board.
This announcement therefore represents the latest effort by the firm to continue to optimise its business operations and re-align its interests.
“Drawing from its decades of leadership and innovation, Wood Mackenzie is playing a vital role at the forefront of the global energy transition by providing essential data and insights to organizations across the value chain,” said Ramzi Musallam, Chief Executive Officer and Managing Partner of Veritas.
“In partnership with Wood Mackenzie leadership, and with the strong backing of our strategic investment, we have an opportunity to enhance and expand the datasets and solutions the company provides to its growing customer base, from upstream producers who are looking to decarbonize to new energy asset managers who want to optimize their investments.”
The total purchase price for the sale of Wood Mackenzie remains subject to adjustments for the working capital and the debt of the business at when the deal closes, which is expected in Q1 2023.
Verisk says it intends to use the after-tax proceeds to pay down debt and return value to shareholders through share repurchases.
Morgan Stanley & Co LLC is acting as financial advisor and Davis Polk & Wardwell LLP as legal advisor to Verisk in connection with the transaction, while Gibson, Dunn & Crutcher LLP is acting as legal advisor to Veritas.