FactSet (NYSE: FDS) (NASDAQ:FDS), a global provider of integrated financial information and analytical applications, today announced that it has entered into a definitive agreement to acquire CUSIP Global Services (CGS) from S&P Global for $1.925 billion in cash. FactSet also expects to receive an estimated tax benefit of approximately $200 million as part of the transaction.1 The acquisition will significantly expand FactSet’s critical role in the global capital markets, advancing its open data strategy.
CGS manages a database of 60 different data elements uniquely identifying more than 50 million global financial instruments. It is the foundation for security master files relied on by critical front, middle and back-office functions. CGS is the exclusive provider of CUSIP and CINS identifiers globally and also acts as the official numbering agency for ISIN identifiers in the United States.2
As part of FactSet, CGS will continue to carefully steward the CUSIP system in close partnership with the American Bankers Association (ABA) to ensure both a seamless transition and continued innovation. As a result, CGS will continue to reliably serve the global securities market as it evolves and grows.
CGS generates annual revenues of approximately $175 million with consistent revenue growth rates in the mid- to high-single digit range. It is expected to deliver robust margins and be immediately accretive to FactSet’s adjusted operating margins. The transaction is also expected to be accretive to FactSet’s adjusted diluted EPS in the first year of ownership, excluding purchase price amortization and one-time integration costs.
CGS will function as a part of FactSet Content and Technology Solutions (CTS). The acquisition, on a pro forma basis, will increase CTS’s Annual Subscription Value (ASV) to more than $425 million. CGS’s experienced and trusted team will report to Jonathan Reeve, Executive Vice President and Head of CTS, FactSet.
1 FactSet expects to receive a step up in tax basis resulting in an annual deduction over the next 15 years with an estimated tax benefit of approximately $200 million on a present value basis.
2 CUSIP (Committee on Uniform Security Identification Procedures) is a 9-character alphanumeric identifier assigned for issuers and their financial instruments offered in the U.S. and Canada. For outside of North America, CINS (CUSIP International Number System) is a 9-character alphanumeric identifier that uses the same 9-character format as CUSIP identifiers and is the local identifier of more than 30 other international markets. CUSIP was launched in 1968 by the ABA and CGS has been managing the CUSIP system on behalf of the ABA since its inception.
“We are excited to welcome CGS’s talented team to the FactSet family,” said Phil Snow, CEO, FactSet. “CGS is a unique asset with tremendous market recognition providing deep alliances across the financial industry. Its core competency in securities identification aligns well with FactSet’s industry leading data management capabilities. We believe this acquisition will greatly benefit FactSet’s clients, employees and shareholders.”
“CGS has delivered outstanding service, reliability, and innovation to the global securities market for more than 50 years, and I am highly confident that FactSet will continue to build on this heritage,” said Douglas L. Peterson, President and CEO of S&P Global.
“The American Bankers Association is looking forward to working with FactSet as our new partner to steward the CUSIP system,” said Rob Nichols, President and CEO of the ABA. “Building off a strong foundation, we’re confident FactSet has the resources, experience, and innovation needed to expand CUSIP as it meets the evolving needs of market participants around the world. We’re excited for the future.”
Financing and Closing Conditions
FactSet will fund the transaction through a combination of cash-on-hand and committed financing. The acquisition is subject to customary closing conditions, including regulatory approvals and the consummation of the S&P Global and IHS Markit merger. The transaction is expected to close during the first calendar quarter of 2022.