News of the merger plans have gained the attention of investors and INFO stock is seeing heavy trading today. The stock has moved some 4 million shares as of this writing. That’s roughly double its daily average trading volume of 2.02 million shares.
Here’s what investors need to know about the S&P Global-IHS Markit merger.
- The merger is an all-stock transaction that values IHS Markit at $44 billion, which includes net debt of $4.8 billion.
- A news release notes that this will have each share of IHS stock being exchanged for .2838 shares of SPGI stock.
- Once the deal is complete, SPGI shareholders will own 67.75% of the combined company and the remaining 32.25% will belong to INFO shareholders.
- IHS Markit and S&P Global say they expect the merger to be accretive to earnings in the second full year following the deal’s completion.
- It’s also expecting annual run-rate cost synergies of approximately $480 million once the merger is complete.
- Other benefits include recurring revenue of 76% and annual organic revenue growth between 6.5% and 8% in 2022 and 2023.
- So long as there are no issues, the two companies expect the deal to close during the second half of 2021.
While investors in INFO stock are boosting it following the news, not everyone is sold on the merger being a good idea. Truist analyst Andrew Jeffrey notes that the deal values INFO stock at $98 per share, which he believes undervalues it. The stock was trading at $92.58 when markets closed on Friday.
INFO stock was up 7.9% and SPGI stock was up 2.4% as of noon Monday.
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.