Moody’s Corporation is acquiring RMS from Daily Mail and General Trust plc for approximately £1,425 million (approximately $2 billion). RMS is a global provider of climate and natural disaster risk modelling and analytics. It services the global property and casualty insurance and reinsurance industries.
In the 12 months to 31 March 2021, RMS generated £33 million adjusted operating profit and £38 million EBITDA from revenues of £242 million. Based on these figures, the acquisition is made for is a premium valuation of more than 30 times EBITDA.
Moody’s reports that, subject to final conformity to their accounting policies, for the fiscal year ending September 30, 2021, RMS is expected to generate revenue of approximately $320 million and adjusted operating income of approximately $55 million.
The acquisition will immediately increase Moody’s insurance data and analytics business to nearly $500 million in revenue. RMS is expected to generate up to $150 million of incremental run-rate revenue by 2025.
“Today’s leaders face a complex, interlinked world of risks and stakeholders,” said Rob Fauber, President and Chief Executive Officer of Moody’s. “In the context of a global pandemic, the climate crisis and increasing cyberattacks, our customers must manage a wider range of risks than ever before. We are excited to add RMS and its team of world-class data scientists, modelers and software engineers to the Moody’s family to help accelerate solutions that enable customers to build resilience and make better decisions.”
Moody’s will fund the transaction through a combination of cash-on-hand and the issuance of new debt. The acquisition is expected to close in late 3Q 2021.
USA, New York, NY & Newark, CA & UK, London