In its recent strategy update, Euromoney highlighted price discovery (the main activity of a PRA) as a key investment theme. The acquisition of RISI follows the acquisition in August last year of FastMarkets, a leading provider of real-time metals market pricing information, which has significantly enhanced Metal Bulletin’s position in price reporting.
Founded in 1985, RISI has been part of AXIO Group, an Epiris Managers’ business, since 2013. RISI is headquartered in Bedford, Massachusetts, and 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 fibre and saw logs markets. Its price indices are critical to 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 revenues were $29.6 million and its unaudited EBITDA was $7.7 million. RISI’s revenues are derived predominantly from selling subscription products and have high revenue renewal rates. RISI’s unaudited gross assets at December 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. The acquisition is expected to be earnings-enhancing for Euromoney in its current financial year.
Euromoney’s strategy is actively to manage a portfolio of businesses in asset management, price discovery and other sectors where information, data and convening market participants are valued. Euromoney delivers products and services that support clients’ critical activities. This acquisition continues that strategy. 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.
Andrew Rashbass, CEO of Euromoney, said: “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, Chief Executive Officer of AXIO Group Management, a business backed by Epiris Managers, said: “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.”
