Advice to shareholders: Deutsche Börse acquires the American ISS

Posted on Nov 17, 2020 at 9:44 PM

The operator of the Frankfurt Stock Exchange, Deutsche Börse, announced Tuesday evening the repurchase of 80% of the shares of the American company advising shareholders, Institutional Shareholder Services (ISS), valued at nearly 2 billion euros. ISS provides institutional investors with recommendations for voting at shareholders’ meetings of listed companies.

The German group buys “in partnership with the current management (of ISS) and Genstar Capital” the majority of the target “on the basis of a (global) valuation of 2.28 billion dollars (1.93 billion euros), without cash or debt, for 100% of ISS, ”he said in a press release. Genstar Capital and the current management of ISS will retain an approximate 20% stake in ISS after the transaction.

Guarantees of independence

“To ensure the independence of the data and research activities, ISS remains independent within Deutsche Börse, and Gary Retelny, CEO of ISS, will continue to lead the company,” said a statement. “ISS can benefit from the infrastructure of the Deutsche Börse group and the international index activities. At the end of the operation, ISS will operate with the same independence as before with regard to its data and research offers ”.

For the German acquirer, the new American entity is particularly prosperous: “In 2020, ISS should generate net sales of more than 280 million dollars (pro forma IFRS) and an adjusted EBITDA margin of around 35 % before transaction effects, the latter having an additional development potential. Net sales are expected to grow organically by more than 5% per year on average until 2023 ”, comments Deutsche Börse. ISS serves more than 4,000 clients, including leading institutional investors around the world, continues the acquirer.

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