The Jersey City-based data analytics provider’s 3E unit offers industry-leading software and information services to 5,000 customers worldwide, including industry leaders across chemical manufacturing, retail and pharmaceuticals. Verisk acquired 3E in 2010 for $107 million, and subsequently integrated its 2019 acquisition of Content-as-a-Service, or CaaS, into the 3E business.
New Mountain Capital is a growth-oriented investment firm with over $35 billion in assets under management.
The total purchase price consists of $630 million of cash consideration paid at closing, up to $50 million of earnout payments based on financial performance in 2023 and 2024, and up to $270 million of additional deferred payments based on New Mountain’s future return on its investment, for a potential aggregate cash consideration of up to $950 million.
Verisk intends to return the after-tax proceeds to shareholders through share repurchases.
“The sale of 3E marks an important step in Verisk’s ongoing comprehensive portfolio review to best position Verisk for continued solid growth,” said Scott Stephenson, chairman, CEO and president of Verisk. “These efforts are consistent with our focus on identifying the most value creating opportunities available to the company and our shareholders, and ensuring we generate strong returns on our invested capital. Today’s announcement represents a great outcome for Verisk, our shareholders and the talented 3E team.”
Lee Shavel, chief financial officer and group president, Verisk, said: “New Mountain Capital’s strategy of backing best-in-class companies is a strong endorsement of the essential role 3E plays in the success of customers in nearly every industry around the globe. We have great confidence that 3E will be well-positioned to continue delivering critical services and value to its customers under New Mountain Capital.”
Pete Masucci, managing director of New Mountain Capital, said: “3E has a long history of innovation that has resulted in the development of differentiated and mission-critical software, data and services for its clients. We believe 3E is positioned to benefit from favorable macro trends as companies keep up with continuously evolving global regulations, provide a safer working environment for their employees and focus on meeting their sustainability goals.”
BofA Securities is acting as financial adviser and Davis Polk & Wardwell as legal adviser to Verisk in connection with the transaction. Simpson Thacher & Bartlett is acting as legal adviser to New Mountain.