Benzinga | Dec 27, 2021 08:04AM EST

News Corp to Acquire Base Chemicals from S&P Global and IHS Markit for $295M Cash

Base Chemicals is known for its pricing data, insights, analysis and forecasting capabilities for the world's most important base chemicals delivered through its leading Market Advisory and World Analysis services. Base Chemicals has a strong track record of growth, with a revenue base that is nearly 100% digital and recurring, and, similar to OPIS, has high margins with modest Capex requirements.

By becoming part of Dow Jones, it is expected Base Chemicals will benefit from Dow Jones' expertise in news, research and events. Similarly, Base Chemicals' rich analysis and forecasting capabilities provide opportunities for Dow Jones to enhance its data, price and news solutions. Base Chemicals is also a companion to OPIS, with significant customer overlap, and it is expected this new vertical will be led by the same management team responsible for OPIS and Base Chemicals today.

News Corp is acquiring Base Chemicals for $295 million in a cash transaction, subject to customary adjustments. The agreement was reached following the UK Competition and Markets Authority request that IHS Markit divest Base Chemicals as part of the S&P Global and IHS Markit merger plans. News Corp's acquisition of Base Chemicals is subject to customary closing conditions, including regulatory approvals and the completion of the S&P Global and IHS Markit merger. In addition, 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 approximately $46 million on a present value basis.

...

In its most recent fiscal year, ended November 30, 2021, Base Chemicals was expected to generate approximately $65 million in revenues. Base Chemicals' revenues are geographically diverse, with more than 1700 customers across a wide range of industries, and approximately 185 employees. Its main products include Market Advisory Services, which provide pricing, insights and weekly/monthly reports; and World Analysis, which produces annual reports and maintains a database of trends and long-term forecasts.