Business information provider IHS Inc. (IHS) Monday said it signed a definitive agreement to acquire automotive information and marketing solutions provider R.L. Polk & Co. for $1.4 billion. IHS expects the acquisition to be significantly accretive to its 2014 earnings per share, excluding purchase price amortization.
Scott Key, president and chief executive officer stated, "The acquisition of R.L. Polk brings extensive and complementary information and analytical solutions that would establish IHS as a vital strategic partner of the global automotive value chain."
Southfield, Michigan-based R.L. Polk, with Polk and CARFAX divisions, operates in Australia, Canada, China, France, Germany, Italy, Japan, South Korea, Spain, the UK and the U.S.
IHS Chief Financial and IT Officer Todd Hyatt stated that with about $400 million in annual revenues, R.L. Polk brings to IHS an attractive financial profile and accretive growth trajectory.
Hyatt added that around 75 percent of the firm's overall revenue is recurring in nature, with nearly 90 percent renewal rates, attractive margins and high levels of free cash flow conversion.
According to Stephen Polk, CEO of R.L. Polk & Co. "We're excited about the opportunities this acquisition would offer R.L. Polk clients by supporting solutions and analytics for our more than 30,000 customers worldwide."
IHS will fund the acquisition with 10 percent equity and the remainder with cash on hand, cash from an existing revolver and a new bank term loan. The acquisition is subject to customary closing conditions.
M. Klein and Co. was the strategic and financial advisor to IHS in this transaction.
IHS closed Friday's regular trading at $106.94 on the NYSE.
by RTTNews Staff Writer
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