McGraw Hill to Pay $2.2 Billion for SNL Financial

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McGraw Hill Financial Inc. agreed to buy SNL Financial, the financial news and data services provider owned by buyout firm New Mountain Capital, for about $2.23 billion to add content on the banking and insurance industries.

SNL joins a roster of subsidiaries that also includes Standard & Poor’s Ratings Services, the S&P Dow Jones Indices and Platts, which provides price data and analytics on commodities

McGraw Hill is buying SNL two years after staking its future on financial services by unloading its publishing business. The purchase is underscoring the interest in established firms that provide financial news and analytics. Japan’s Nikkei Inc. agreed last week to buy the FT Group from Pearson Plc for $1.3 billion, and Pearson sold Mergermarket to BC Partners, a London-based private equity firm, for 382 million pounds ($592 million) in 2013.

SNL provides data and analysis on the banking, insurance, energy and real estate industries. New York-based New Mountain took a majority stake in the company in 2011 in a deal that valued SNL at $450 million.

The economic impact will be partly offset by tax benefits with an estimated present value of about $550 million, McGraw Hill said in a statement Monday.

Bloomberg LP, the parent of Bloomberg News, competes with SNL in selling financial news and information.

Earning Announced

The deal will complement McGraw Hill’s data and credit information unit Standard & Poor’s and that division’s Capital IQ, which was acquired in 2004, according to a company statement.

McGraw Hill, based in New York, sold its education business three years ago for $2.5 billion to Apollo Global Management LLC to focus on financial services.

McGraw Hill moved up its second-quarter earnings results and reported revenue growth of 3 percent from a year ago to $1.34 billion, the company said Monday. Earnings per share rose to $1.29 from $1.05 per share a year earlier, it said. That was helped by 6 percent revenue increase from S&P Capital IQ. The company’s credit ratings service declined 1 percent to $658 million.

McGraw Hill’s shares fell 0.9 percent Friday to close at $105.58 in New York, giving it a market value of about $28.9 billion.