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News Corp has acquired the Base Chemicals business from S&P Global Market Intelligence for $295 million. This acquisition will enhance the Dow Jones energy, chemicals, and sustainability vertical. Base Chemicals generated $65 million in revenue last fiscal year, primarily from digital and recurring sources. The deal is expected to yield a tax benefit of approximately $46 million over 15 years. This strategic move aims to leverage cross-selling opportunities with existing Dow Jones audiences.
Positive
Acquisition aligns with Dow Jones' expansion into energy, chemicals, and sustainability sectors.
Base Chemicals has a strong revenue base of approximately $65 million, primarily digital and recurring.
Expected tax benefit of around $46 million enhances financial outlook.
Cross-selling potential with the Wall Street Journal and other Dow Jones platforms.
Negative
None.
Joins OPIS In Expanded Dow Jones Energy, Chemicals and Sustainability Vertical
NEW YORK--(BUSINESS WIRE)--
News Corp announced that it has completed the acquisition of the Base Chemicals business from S&P Global Market Intelligence.
The business will operate under the name Chemical Market Analytics by OPIS, a Dow Jones company. News Corp acquired OPIS (the Oil Price Information Service) and related assets from S&P Global and IHS Markit in February.
Base Chemicals has a strong track record of growth, with a revenue base that is nearly 100% digital and recurring, and, similar to OPIS, has high margins with modest Capex requirements.
News Corp is acquiring Base Chemicals for $295 million in a cash transaction, subject to customary adjustments, and follows the UK Competition and Markets Authority request that IHS Markit divest Base Chemicals and OPIS as part of the S&P Global and IHS Markit merger. S&P Global and IHS Markit completed their merger in February. In connection with the Base Chemicals acquisition, News Corp 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 $46 million on a present value basis.
“Base Chemicals, together with OPIS, will substantially extend the reach and strength of Dow Jones’ news and information capabilities in commodities, where the desire for data, analysis and insight is burgeoning, especially in energy, renewables, chemicals and related fields,” said Robert Thomson, Chief Executive of News Corp. “Dow Jones will capitalize on the appetite for trusted and accurate information for years to come, and we also see strong cross-sell and upsell potential using the potent Wall Street Journal, Investor’s Business Daily and MarketWatch audiences as a premium pool for customer leads. We are also delighted that the acquisitions of both Base Chemicals and OPIS came at a distinctly favorable price.”
Almar Latour, Chief Executive Officer of Dow Jones and Publisher of The Wall Street Journal said: “The business and teams we are welcoming to our company today have built one of the most trusted sources of information and analysis across the global chemical value chain. This knowledge and expertise is an excellent companion to OPIS, enabling us to expand into new customer segments as we continue to lay the foundations for our new energy, chemicals and sustainability vertical. Our collective skills and strengths, especially our shared legacies of providing trusted, rigorous information, open up a wide range of growth opportunities for Dow Jones.”
“We are very excited to welcome the talented team at Chemical Market Analytics to the Dow Jones family,” said Brian Crotty, general manager for OPIS. “Uniting Chemical Market Analytics' deep expertise and trusted reputation with Dow Jones’ global reach will enable us to deliver deeper and richer information and analysis to our customers. We look forward to the impact we’ll have together.”
Base Chemicals is known for its pricing data, insights, analysis and forecasting capabilities for the world’s most important base chemicals delivered through its leading Market Advisory and World Analysis services.
By becoming part of Dow Jones’ professional information business, it is expected Base Chemicals will benefit from Dow Jones’ expertise in news, research and events. Similarly, Base Chemicals’ rich analysis and forecasting capabilities provide opportunities for Dow Jones to enhance pricing, data and news solutions.
In its most recent fiscal year, ended November 30, 2021, Base Chemicals generated approximately $65 million in revenues. Base Chemicals’ revenues are geographically diverse, with more than 1,700 customers across a wide range of industries, and approximately 185 employees.
News Corp reported its FY 2022 Third Quarter results on May 5, 2022; the company had record third quarter revenues and profitability. Also in Q3, Dow Jones reported its highest third quarter revenue since its acquisition with 16% growth. The Dow Jones professional information business grew 13%, reflecting robust growth in Risk & Compliance and the inclusion of one month of OPIS results.
Gibson, Dunn & Crutcher LLP served as legal counsel for News Corp in the transaction.
Forward-Looking Statements
This release contains forward-looking statements based on current expectations or beliefs, as well as assumptions about future events, and these statements are subject to factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The words “expect,” “estimate,” “anticipate,” “predict,” “believe,” “potential” and similar expressions and variations thereof are intended to identify forward-looking statements. These statements appear in a number of places in this release and include statements with respect to, among other things, the potential benefits from the acquisition of Base Chemicals and OPIS. Readers are cautioned that any forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Many factors could cause actual results to differ materially from those described in these forward-looking statements. The forward-looking statements in this release speak only as of this date and News Corp and Dow Jones undertake no obligation (and expressly disclaim any obligation) to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
About News Corp
News Corp (Nasdaq: NWS, NWSA; ASX: NWS, NWSLV) is a global, diversified media and information services company focused on creating and distributing authoritative and engaging content and other products and services. The company comprises businesses across a range of media, including: digital real estate services, subscription video services in Australia, news and information services and book publishing. Headquartered in New York, News Corp operates primarily in the United States, Australia, and the United Kingdom, and its content and other products and services are distributed and consumed worldwide. More information is available at: http://www.newscorp.com.
What is the significance of News Corp's acquisition of Base Chemicals?
The acquisition enhances Dow Jones' capabilities in the energy, chemicals, and sustainability sectors, allowing for greater data and analysis offerings.
How much did News Corp pay for Base Chemicals?
News Corp acquired Base Chemicals for $295 million.
What are the expected benefits of the Base Chemicals acquisition for News Corp?
Expected benefits include a tax deduction of approximately $46 million and expanded market reach and analytical capabilities.
What was Base Chemicals' revenue in its last fiscal year?
Base Chemicals generated approximately $65 million in revenue in its most recent fiscal year.
When did News Corp complete the acquisition of Base Chemicals?
News Corp completed the acquisition on May 31, 2022.
