McGraw-Hill Financial Buys SNL Financial for $2.2B

McGraw-Hill Financial has agreed to acquire SNL Financial, the Charlottesville, Va., parent of SNL Kagan, for $2.225 billion in cash.

"We are enthusiastic about SNL because it is a fast-growing, highly complementary subscription-based business that will enable us to accelerate our strategy to be the leading provider of transparent and independent benchmarks, analytics, data and research across the global capital, commodity and corporate markets," said McGraw-Hill CEO Douglas Peterson in a statement. "This transaction provides unique opportunities to provide our customers with end-to-end data solutions and to develop exciting new services, enhance existing offerings and expand into attractive adjacent markets. Adding SNL to our portfolio creates a high-growth market data and analytics business that will leverage the power of the S&P Capital IQ and Platts global platforms to realize the full potential of SNL's financial and commodities products."

SNL Financial provides proprietary research and data for the financial, media, energy, Real Estate and metals & mining industries. In the media sector, its data is known as the industry standard, and its research regarding affiliate fees, advertising, retransmission consent and pay TV subscribers are widely cited by top media and research companies.

Founded in 1987, SNL Financial has about 3,000 employees based in 10 countries. It purchased Kagan Research in 2007.  

SNL has more than 5,000 customers with deep relationships across banks, insurance companies, corporations, asset managers, power companies and other users. SNL's areas of coverage include:

  • Financial institutions: asset and branch-level analytics; financial, industry, demographic, employment, trade area, and branch data; and  global bank and insurance company news;
  • Real estate: data on 500+ global REITs, nearly 500 global property companies, and more than 100,000 unique properties and development projects;
  • Energy: financial coverage of 225+ public companies; industry forecasts; operational stats for nearly 5,000 electric utilities, natural gas companies, and coal producers; data on interstate pipelines, new power projects and mines, and energy-related emissions;
  • Media: hundreds of listed companies, US and European TV networks, global databases including detailed pay TV subscriber information and programming history, and extensive radio coverage;
  • Metals and mining: data on more than 60 countries, 300,000+ drill results, nearly 40,000 properties and nearly 3,000 active companies.

McGraw Hill Financial is expected to fund the transaction, which should close in the third quarter this year, with about $525 million in cash and $1.7 billion in new debt.  

Evercore and Goldman Sachs acted as financial advisors and Wachtell, Lipton, Rosen & Katz and Clifford Chance LLP acted as legal advisors to McGraw Hill Financial.

 "This is an exciting day for our clients, employees and shareholders and a true milestone event in our 28 year history," said SNL Financial CEO Mike Chinn in a statement. "New Mountain Capital has been a tremendous partner for us over the last four years. The team there provided excellent guidance and supported numerous growth initiatives that enabled us to double our revenues over that period.  We believe McGraw Hill Financial, Doug Peterson and his leadership team are ideal partners as we relentlessly pursue our mission of providing the highest quality sector-specific data, news and analytics to our clients.  We're thrilled to continue this journey with the McGraw Hill Financial team and join their portfolio of market-leading brands."

Following the closing of the transaction, Chinn will report to Peterson.

"We're fortunate to have had the opportunity to partner with such a special company and its outstanding management team,” said SNL Financial chairman and New Mountain Capital managing director Peter Masucci in a statement. “We are confident that SNL is well-positioned to continue its strong growth as an integral part of McGraw Hill Financial and wish Mike Chinn, Doug Peterson, and their management teams great success."