Deutsche Boerse is set to acquire a majority share of approximately 80 percent in Institutional Shareholder Services (ISS), valuing ISS at $2.3 billion for 100 percent of the business (cash and debt free).
Genstar Capital and current management will continue to hold a stake of approximately 20 percent of the governance, environmental, social and governance (ESG) data and analytics provider.
The transaction is expected to close in the first half of 2021 subject to customary closing conditions and regulatory approvals.
With this transaction, Deutsche Boerse said it “strongly commits” to one of the key trends in the industry that is expected to change the investment space over the coming years.
Deutsche Boerse explained that ISS’ ESG and data expertise will allow Deutsche Boerse to emerge as a leading global ESG data player.
The transaction will bring a strengthened capital structure to ISS and the ability to further accelerate organic and inorganic growth initiatives for the benefit of ISS’ clients.
After the closing, ISS will continue to operate with the same editorial independence in its data and research organisation.
The current executive leadership team with CEO Gary Retelny will co-invest in the transaction and will also lead the business of ISS after the closing.
Commenting on the acquisition, Theodor Weimer, CEO of Deutsche Boerse, said: “Together, ISS and Deutsche Boerse have complementary ingredients to become one of the globally leading ESG players of the future. We have been deeply impressed by the culture and the leadership team of ISS. We look forward to partnering with ISS and working together to support the company’s continued business growth and jointly drive forward Deutsche Boerse’s strategy.”
Gary Retelny, ISS president and CEO, said: “We at ISS look forward to partnering with Deutsche Boerse, along with Genstar Capital, as we continue to build upon the success of our diversified businesses around the world. As we have for more than 35 years, we remain committed to ensuring the provision of the highest quality research, data, analytics, and insight to our clients globally.”
Genstar Capital managing director, Tony Salewski, added: “Gary Retelny and the ISS management team have built a market-leading data and governance platform through innovative product development and impactful acquisitions, and we appreciate the partnership we have had with them over the past three years. As we continue as investors in ISS, we are excited by the value that Deutsche Boerse will bring and our shared commitment to further accelerate ISS’ growth.”
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