ESG: Morningstar Announces Deal to Buy Sustainalytics to Boost ESG Support
Morningstar, (Nasdaq: MORN) announced an agreement to acquire Sustainalytics, a globally recognized leader in environmental, social, and governance (ESG) ratings and research.
Morningstar currently owns an approximate 40% ownership stake in Sustainalytics, first acquired in 2017. Under the terms of the deal, Morningstar will buy the remaining approximate 60% of Sustainalytics.
Morningstar Buys Sustainalytics.
The transaction consideration includes a cash payment of about 55 million euros. The deal will see more cash payments in 2021 and 2022 based on a multiple of Sustainalytics’ 2020 and 2021 fiscal year revenues.
Based on the upfront consideration, Morningstar estimates the enterprise value of Sustainalytics at 170 million euros.
The deal will likely close during Q3 2020.
Morningstar CEO Kunal Kapoor commented on the deal: “Modern investors in public and private markets are demanding ESG data, research, ratings, and solutions in order to make informed, meaningful investing decisions. From climate change to supply-chain practices, the nature of the investment process is evolving and shining a spotlight on demand for stakeholder capitalism. Whether assessing the durability of a company’s economic moat or the stability of its credit rating, this is the future of long-term investing,” “By coming together, Morningstar and Sustainalytics will fast track our ability to put independent, sustainable investing analytics at every level – from a single security through to a portfolio view – in the hands of all investors. Morningstar helped democratize investing, and we will do even more to extend Sustainalytics’ mission of contributing to a more just and sustainable global economy.”
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