FactSet has reached a deal with S&P Global to buy CUSIP Global Services for $1.925 billion in cash, helping expand its role in the global capital markets and advancing its open data strategy.
FactSet, a global provider of integrated financial information and analytical solutions located in Norwalk, Connecticut, will become the CUSIP system’s second operator on behalf of the American Bankers Association as a result of the agreement.
S&P Global is divesting CUSIP Global Services at the request of the European Commission to get regulatory permission for its proposed merger with IHS Markit.
FactSet plans to fund the deal with a mix of cash on hand and committed financing. The acquisition is contingent on regulatory clearances and the completion of the S&P Global and IHS Markit merger, among other things. The acquisition is scheduled to be completed in the first quarter of 2022.
“The opportunity to operate CGS was quite compelling,” said Phil Snow, FactSet CEO. “CUSIP Global Services is a unique asset with tremendous market recognition and deep alliances with market participants across the financial industry.
Snow said CUSIP Global Services will expand FactSet’s role in the global capital markets, advancing its open data strategy. This will better position FactSet to address its client’s growing needs, and by better understanding their clients’ workflows, it allows the company to become a better partner, he said.
FactSet Content and Technology Solutions will be home to CUSIP Global Services. On a pro forma basis, the purchase will boost Content and Technology Solutions’ Annual Subscription Value to about $425 million. Jonathan Reeve, executive vice president and head of FactSet’s Content and Technology Solutions, will oversee the CUSIP Global Services team.
“The entire CUSIP Global Services staff looks forward to … ensuring that the CUSIP system continues to deliver best-in-class securities identification and data-management solutions,” said Scott Preiss, managing director and global head of CUSIP Global Services. “Working closely with our partners at American Bankers Association, market participants can count on the talented professionals at CUSIP Global Services during this transition and into the future.”
American Bankers Association introduced the CUSIP system with CUSIP Global Services in 1968 to establish a consistent means of identifying securities.
More than 62.8 million CUSIP identifiers have been issued to financial instruments spanning a broad variety of asset classes, regardless of trading venue, with more than 9 million in active use.
As part of FactSet, CUSIP Global Services will continue to manage the CUSIP system with the American Bankers Association to guarantee a smooth transition and ongoing innovation. CUSIP Global Services will continue to service the global securities industry in a reliable manner as it changes and expands.
CUSIP Global Services generates roughly $175 million in yearly revenue, with stable revenue growth rates in the mid- to high-single digits. It is projected to generate strong profits and add to FactSet’s adjusted operating margins right away. In addition, excluding acquisition price amortization and one-time integration costs, the deal is projected to be accretive to FactSet’s adjusted diluted earnings-per-share in the first year of ownership.
“CUSIP Global Services 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.