The Base Chemicals business of IHS Markit to
Join OPIS in Creating and Growing an Energy, Chemicals and
Renewables Vertical at Dow Jones
Global, Digital and Profitable Business to
Bolster Dow Jones’ Strategy to Deliver Valuable and Trusted
Specialized Content to Customers
News Corp announced today that it has entered into an agreement
to acquire the Base Chemicals business from S&P Global and IHS
Markit.
Base Chemicals will become part of Dow Jones’ Professional
Information Business, alongside OPIS, the energy and renewables
data and information business. The OPIS acquisition (along with
related assets), also from S&P Global and IHS Markit, was
announced in August. The addition of Base Chemicals and OPIS will
further enhance Dow Jones’ information services business.
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.
Base Chemicals has a consistent history of growth and a broad
geographical footprint, given the continuing global demand for base
chemical pricing, analysis and forecasting. In addition, News Corp
believes Base Chemicals has significant growth potential,
particularly as demand changes and new products emerge as the world
transitions to renewable energy sources in the years ahead.
“We are delighted with the opportunistic acquisition of Base
Chemicals, which complements our purchase of OPIS, and will
certainly strengthen the highly profitable and decidedly digital
Professional Information Business at Dow Jones,” said Robert
Thomson, Chief Executive of News Corp. “From setting price
benchmarks for chemicals, to tracking renewables and monitoring
resource trends that impact most companies, we expect the
incomparable intelligence of Base Chemicals, combined with the news
and analysis of Dow Jones, will be formidable and lucrative.”
“Base Chemicals will help Dow Jones expand the reach of our
information services to new professional users and industries,”
said Almar Latour, Chief Executive Officer of Dow Jones and
Publisher of The Wall Street Journal. “It will bolster our data and
price expertise, adding valuable analysis and forecasting
capabilities. Along with the strength of The Wall Street Journal,
Barron’s, MarketWatch, Investor’s Business Daily, Dow Jones
Newswires and Factiva, we believe Base Chemicals and OPIS will help
Dow Jones customers navigate key issues of our time, including the
ongoing transition to sustainability.”
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.
The total addressable market is expected to increase, with new
demand anticipated for pricing data and insights and analysis
resulting from the transition to renewables and related structural
changes in the broader chemical industry.
In the first quarter of Fiscal Year 2022, Dow Jones recorded a
15% increase in revenues, compared to the same quarter last year,
with Segment EBITDA surging 32 percent – that profitability was a
record for a first quarter. Dow Jones’ Professional Information
Business experienced a 13% increase in revenues in the quarter.
Gibson, Dunn & Crutcher LLP is serving as legal counsel for
News Corp in the transaction.
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,” “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
Base Chemicals and 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.
About Dow Jones
Dow Jones is a global provider of news and business information,
delivering content to consumers and organizations around the world
across multiple formats, including print, digital, mobile and live
events. Dow Jones has produced unrivaled quality content for more
than 130 years and today has one of the world’s largest
news-gathering operations globally. It produces leading
publications and products including the flagship Wall Street
Journal, America’s largest newspaper by paid circulation; Factiva,
Barron’s, MarketWatch, Mansion Global, Financial News, Dow Jones
Risk & Compliance and Dow Jones Newswires. Dow Jones is a
division of News Corp (Nasdaq: NWS, NWSA; ASX: NWS, NWSLV).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211226005004/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 Jennifer Thurman 303-408-4201
jennifer.thurman@dowjones.com
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