WoodMac staff in line for windfall after takeover
US data analytics company Verisk, which is headquartered in New Jersey and listed on the Nasdaq market, has agreed a £1.85 billion cash deal to buy the Edinburgh-based firm, which has some 1,000 staff around the world.
About 500 of WoodMac’s staff are based in Scotland, and roughly half of those are shareholders in the business. It is understood that those who own a stake, working across all levels in the firm, will receive an average cash payout of about £500,000 as a result of the buyout.
The planned takeover, which is expected to complete in the second quarter of this year, comes after speculation that WoodMac’s private equity backer was considering a £2bn stock market flotation of the business.
Hellman & Friedman (H&F) paid rival private equity firm Charterhouse Capital Partners £553 million for a 63 per cent holding in the group in July 2012. That deal triggered multi-million-pound windfalls for its top management, including chief executive Stephen Halliday.
Halliday said that Verisk was a “natural home” for the business, which also has offices in London, Dubai, Houston, Singapore and Sydney. “Our teams stand ready to build on the strength of our existing solutions with the benefit of Verisk’s analytic expertise, customer relationships, and financial resources,” he added.
Halliday, who joined the firm as an analyst in 1989, will continue to lead the business, reporting to Verisk president and chief executive Scott Stephenson, who has led the group since 2011.
“Wood Mackenzie is a world-class company and an excellent addition to the Verisk family,” Stephenson said.
“The company has significant opportunities in the global energy, chemicals, metals and mining verticals, a track record of consistent revenue growth and profitability, distinctive and mission-critical solutions, and an impressive management team. Those are all features of a unique and wonderful business.”
Dickson Minto, the Edinburgh-based law firm, acted as legal adviser to the WoodMac management team, who also received financial advice from Deutsche Bank and Lazard.
Founded in the 1840s as an Edinburgh-based stockbroker, WoodMac began evolving into its current form in the 1970s, when it began writing intricate reports on the North Sea sector. It now serves more than 800 clients in 80 countries, spanning energy and mining companies to financial institutions and governments.
The company changed hands several times before Bank of Scotland backed a 2001 management buy-out from Deutsche Bank, and in 2005 private equity firm Candover came on board as an investor. Four years later Candover sold out to Charterhouse, before H&F bought a controlling stake in 2012. Under that deal, 340 members of staff who owned shares in WoodMac shared a £90m windfall, with an average pay-out of around £250,000.
In September, WoodMac reported a 12 per cent rise in revenues to £212.8m for 2103, with underlying pre-tax profits 21 per cent higher at £104.7m, in what Halliday described as an “extremely exciting year” for the firm.
Verisk said today that WoodMac’s revenues had grown to £227m in the year to December, with earnings edging up to £107m. It is not known whether the US group will be retaining the WoodMac trading name.
Patrick Healy, managing director and deputy chief executive of H&F, said: “It has been a great privilege to be the partner of Wood Mackenzie. Together we made significant investments in technology and in new product development to further enhance the client user experience. Wood Mackenzie is positioned for continued growth and innovation with Verisk as its new partner.”
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