FactSet Research Systems Inc. (NYSE:FDS) (NASDAQ:FDS) announced it has completed the sale of its market research business, consisting of Market Metrics and Matrix Solutions, to Asset International, a portfolio company of Genstar Capital.
Upon completion of the sale on July 1, 2016, FactSet received $165 million in cash, less certain adjustments including, among others, a customary working capital adjustment. Upon the achievement of certain growth targets over the next two years by the market research business that has been sold, FactSet would be entitled to an additional earn-out of $10 million.
Updated Business Outlook for the Fourth Quarter of Fiscal 2016
The following forward-looking statements reflect FactSet’s expectations as of today’s date. Given the risk factors, uncertainties and assumptions discussed below, actual results may differ materially. FactSet does not intend to update its forward-looking statements until its next quarterly results announcement, other than in publicly available statements.
Fourth Quarter Fiscal 2016 Expectations:
- Revenues are expected to range between $286 million and $292 million.
- GAAP operating margin is expected to range between 31.0% and 32.0%. Adjusted operating margin is expected to range between 32.5% and 33.5%.
- The annual effective tax rate is expected to range between 28.0% and 29.0%.
- GAAP diluted EPS should range between $1.61 and $1.65. Adjusted EPS is expected to range between $1.68 and $1.72. The midpoint of the adjusted EPS range represents 12.6% growth over the prior year.
$120 Million Accelerated Share Repurchase Program
On July 1, 2016 FactSet entered into an accelerated share repurchase agreement with Bank of America, N.A. (“BofA”) to repurchase $120 million of FactSet’s common stock. This agreement was entered into pursuant to FactSet’s previously announced $165 million share repurchase program approved by FactSet’s Board of Directors on May 19, 2016. FactSet expects to receive from BofA approximately 0.6 million shares of FactSet’s common stock on July 5, 2016. At final settlement of the agreement, which is expected to occur no later than the first quarter of fiscal 2017 and may occur earlier in certain circumstances, BofA may be required to deliver additional shares of common stock to FactSet, or, under certain circumstances, FactSet may be required to deliver shares of its common stock or may elect to make a cash payment to BofA, with the number of shares to be delivered or the amount of such payment based on the volume-weighted average price of FactSet’s common stock during the term of the transaction and subject to adjustments pursuant to the terms of the agreement.
Source: Factset Press Release