Verisk to issue $2 billion in bonds, bank debt for Wood Mackenzie buy

By Lisa Kerner

Charlotte, N.C., March 10 – Verisk Analytics, Inc. plans to issue about $2 billion in debt and up to $800 million of equity to acquire Wood Mackenzie from private equity investment firm Hellman & Friedman and other Wood Mackenzie shareholders, according to Verisk chief financial officer Mark V. Anquillare.

“This structure will provide both prepayable debt to meet our delevering commitment, while also allowing us to take advantage of the historically low, long-term interest rates,” he said during a conference call on Tuesday.

BofA Merrill Lynch and Morgan Stanley are acting as joint lead arrangers on a $2.9 billion bridge financing in support of the transaction.

However, the company does not expect to draw on the committed bridge financing, according to Anquillare, and expects “to go directly to the debt and equity markets” to fund the acquisition.

The new debt is expected to be a combination of new public bonds and bank debt, as well as some funding under Verisk’s revolver, the CFO said.

When asked about funding specifics, management said it is eyeing longer-term bonds in the “4.5% range.”

Verisk agreed to purchase Wood Mackenzie for about $2.8 billion in cash (£1.850 billion). The transaction is slated to close during the second quarter.

Anquillare said Verisk expect to maintain its investment-grade debt ratings, pro forma for the acquisition, and intends to delever “quickly” to roughly 2.5 times debt to EBITDA by the end of 2016.

Scott Stephenson, Verisk’s president and chief executive officer, said the company’s capital allocation plans will not change, following the acquisition.

Verisk will use capital to help build its business and engage in share buybacks.

According to Stephenson, Verisk has “some dry powder” for tuck-in acquisitions, as well as for buybacks.

Edinburgh-based Wood Mackenzie provides commercial intelligence for the energy, chemicals, metals and mining industries, providing objective analysis and advice on assets, companies and markets to leading international and national energy and metals companies as well as financial institutions and governments.

Verisk Analytics is a Jersey City-based company that provides information about risk to the insurance, health-care, financial services, government and risk management fields.

© 2015 Prospect News.
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