London-based Euromoney Institutional Investor PLC, the international online information and events group, has agreed to acquire 100 percent of the equity of Boston-based RISI, the leading price reporting agency (PRA) for the global forest products market.
In its recent strategy update, Euromoney highlighted price discovery (the main activity of PRA) as a key investment theme. The acquisition of RISI follows the acquisition in August 2016 of FastMarkets, a leading provider of real-time metals market pricing information, which has significantly enhanced Metal Bulletin’s position in price reporting, the company says.
Founded in 1985, RISI has been part of London-based AXIO Group, an Epiris Managers’, London, business, since 2013. RISI employs 150 people across the United States, China, Belgium, Finland and Brazil. Its product suite consists of pricing data, mill intelligence and analytics, as well as news, research and conferences covering the pulp, packaging, wood products, wood fiber and saw logs markets. Its price indices are used in the daily business operations and trading activities of major paper and board, packaging and other forest-product companies. RISI’s products are embedded in the workflows of its customers, who use RISI’s information to price physical transactions and inform their strategic decisions. Many of RISI’s 2200 price series are used as the main settlement mechanism in industry contracts.
In calendar year 2016 RISI’s unaudited revenue was $29.6 million and its unaudited EBITDA (earnings before interest, taxes, depreciation and amortization) was $7.7 million. RISI’s revenue is derived predominantly from selling subscription products and have high revenue renewal rates, according to Euromoney. RISI’s unaudited gross assets at Dec. 31, 2016, were $29.8 million.
On completion, Euromoney will pay $125 million in cash for RISI, funded from its existing revolving credit facility. Completion is subject to Hart-Scott-Rodino approval in the United States, which is expected to take approximately four weeks, Euromoney says, adding that the acquisition is expected to enhance earnings for Euromoney in its current financial year.
Euromoney says its strategy is to manage a portfolio of businesses in asset management, price discovery and other sectors where information, data and convening market participants are valued.
RISI will be managed as part of a new Price Reporting Division, alongside Metal Bulletin Group (Metal Bulletin, American Metal Market and Industrial Minerals), and will report into Raju Daswani, CEO of Metal Bulletin Group and head of the new Price Reporting Division. This structure will allow RISI and Metal Bulletin Group to benefit from each other’s strengths across a range of areas that power PRAs, Euromoney says.
Andrew Rashbass, CEO of Euromoney, says, “The acquisition of RISI is another important step in Euromoney’s strategy of building a portfolio of leading price reporting agencies in growing international markets. RISI is a very high-quality business, which Euromoney is perfectly placed to grow further. We look forward to working with RISI management and employees around the world to offer the company’s customers products of the highest value.”
Henry Elkington, CEO of AXIO Group Management, says, “Euromoney have recognized the strength and unique position of RISI. We are delighted that the RISI team will be able to continue to grow and develop the company within a leading global PRA.”