IHS Inc agreed to buy Markit Ltd to create a $13 billion London-based data and business research provider, in the latest example of a U.S. company moving its domicile overseas where corporate tax rates are lower. The companies said IHS shareholders will own about 57 percent of the combined company following the close of the all-stock deal, which values Markit at about $5.9 billion.
Englewood, Colorado-based IHS, whose businesses include Jane’s Defence Weekly and technology industry research firm iSuppli, will pay the equivalent of $31.13 per Markit share, a premium of 5.6 percent to Markit’s Friday close. Markit’s shares were up 10.9 percent at $32.70 at midday. The shares have risen about 23 percent since the company went public in June 2014. IHS’s shares, which hit a 3-year low of $92.90 last month, were up 5.6 percent at $116.90.
Markit, founded in 2003 by ex-TD Securities credit trader Lance Uggla in a barn north of London, provides pricing and reference data, index and valuation services. IHS Chief Executive Jerre Stead will become chairman and chief executive of the combined company, IHS Markit. Uggla will be president for now and take over the top job after Stead’s retirement on Dec 31 next year.
IHS shareholders will get 3.5566 shares of the combined company for each share held. The combined company, while maintaining some “key” operations in Colorado, will be based in London.
Markit competes with Thomson Reuters Corp and Bloomberg LP in providing financial data to investors.