Verisk Analytics, Inc. · NASDAQ:VRSK

Verisk Analytics — Merger or Acquisition (March 2015)

22 slides from Verisk Analytics's merger presentation, Mar 10, 2015

  1. Slide 1: Acquisition of Wood Mackenzie

    Acquisition of Wood Mackenzie March 10, 2015

  2. Slide 2: Forward Looking Statements, Safe Harbor & Non-GAAP Financial Measures

    Forward Looking Statements, Safe Harbor & Non- GAAP Financial Measures Forward-Looking Statements This presentation contains forward-looking statements. These statements relate to future events or to future financial performance and involve known and unknown risks, uncertainties, and other factors t

  3. Slide 3: Transaction Summary

    Transaction Summary • Verisk Analytics to acquire Wood Mackenzie (“WoodMac”) for £1.85B (~$2.8B) • WoodMac is a leading provider of data analytics to the global energy, chemicals, metals and Acquisition mining markets with a strong track record of growth and innovation Highlights ‒ FY 2014 Revenues,

  4. Slide 4: Strategic Rationale for WoodMac

    Strategic Rationale for WoodMac • Uncommon business and a leading data analytics provider to the global energy, chemicals, metals and mining verticals Premier Data and • Internationally recognized and trusted brand known for its quality, integrity, accuracy and accessibility Analytics Asset • Highly

  5. Slide 5: WoodMac is a Verisk-Like Business

    WoodMac is a Verisk-Like Business Wood Verisk Distinctives Mackenzie Unique Data Assets Deep Domain Expertise First-Mover Advantage Embedded in Customer Workflows Company Specific Attributes Track Record of Growth & Innovation Subscription Revenue Model and Embedded Solutions Strong Margins and Free

  6. Slide 6: WoodMac Overview

    WoodMac Overview • WoodMac is a leading data analytics provider 2014 Revenue: £227 million in Energy, Chemicals, Metals and Mining 2014 EBITDA: £107 million • Provides data analytics and services to 2014 Unlevered FCF (1): £70 million support strategic decisions for Oil & Gas (O&G) operators and fin

  7. Slide 7: WoodMac's Fully Integrated Product Offerings Yield Proprietary Insights

    WoodMac’s Fully Integrated Product Offerings Yield Proprietary Insights Fully Integrated Offering… …Addressing Customer Needs Consistent view across commodities and the value-chain Oil / oil products Bottom-up approach combined with forward-looking corporate / Gas / LNG(1) macro perspective Commodit

  8. Slide 8: Energy is an Inherently Global Business

    Energy is an Inherently Global Business WoodMac’s Global Footprint: 28 Global Offices in Americas, EMEARC & Asia Pacific Global Headcount: ~1,000 Subscriptions Value APAC APAC ~200 Americas 21% Americas ~300 36% EMEARC EMEARC ~500 43% 8

  9. Slide 9: WoodMac has Embedded Customer Relationships

    WoodMac has Embedded Customer Relationships DATA ANALYTICS ARE CRITICAL TO …USERS RARELY SWITCH FROM BUSINESS… …THERE ARE BARRIERS TO SWITCHING… INCUMBENT “These providers are able to do work it “If you switch providers, you have to “In practice switching providers would be too difficult for us to d

  10. Slide 10: Energy is an Attractive Market that Fits with Verisk

    Energy is an Attractive Market that Fits with Verisk Ability to Grow Ahead of Underlying End Market Growth Adds a global dimension to Verisk in a growing vertical where proprietary data assets create value and customer concentration is modest Inherently Opportunity for Customer Underlying End Existi

  11. Slide 11: WoodMac Has Seen Steady Growth through Cycles

    WoodMac Has Seen Steady Growth through Cycles Strong Historical Secular Demand Future Demand Supported by Key Drivers £250 50% KEY DRIVER LONG TERM (5+ YEARS) Capital intensive industry CAPEX growth requires continuous reinvestment £200 30% Production shift towards Likely to remain a growing unconve

  12. Slide 12: Transaction is Financially Attractive

    Transaction is Financially Attractive Powerful • Enhancing to margin and Free Cash Flow Combination • Diversifies revenue by geography & industry • Combined unlevered free cash flow(1) of >$500 million Strong Cash • Improves cash flow conversion due to lower tax rate Flow Generation • Favorable work

  13. Slide 13: Track-Record of Successful Growth

    Track-Record of Successful Growth Strong, Stable Revenue Growth EBITDA Growth 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Data & Analytics Services EBITDA EBITDA Margin Note: WoodMac financials shown in GBP; CAGRs calculated based on

  14. Slide 14: Attractive Business Model

    Attractive Business Model Strong, Stable Revenue Growth Growing EBITDA Strong Free Cash Flow (1) (£ million) (£ million) (£ million) 49% £250 £135 50% £80 47% £227 45% 45% 44% £70 £213 £40 £107 £200 £191 £108 £105 40% £64 £61 £36 £33 £53 £158 £87 £150 £81 30% £48 £47 £30 £71 £128 £25 £35 £56 £100 £5

  15. Slide 15: Growing & Deeply Embedded Customer Relationships

    Growing & Deeply Embedded Customer Relationships Subscriptions Value Growth (1)… …with Low Customer Concentration 800+ 7% Total Customers Customer Growth CAGR since 2010 No customer >3% 2010 2011 2012 2013 2014 Consistently High Renewal Rates… …Diversified Across End Users (Industry) (2) 98% 98% NOC

  16. Slide 16: Pro Forma Business Adds a Growing and Global Platform

    Pro Forma Business(1) Adds a Growing and Global Platform End Market (Industry) Geography(2) Revenue Type Specialized Financial International Verisk Standalone Transaction/ 5% 4% Services 6% Healthcare 28% 18% 72% 71% 96% Insurance Domestic Subscription Energy International Transaction/ Services Pro

  17. Slide 17: Pro Forma Verisk has ~75% Recurring Revenue

    Pro Forma Verisk has ~75% Recurring Revenue Strong visibility into future inflows from contractual, subscription based revenues Verisk Standalone WoodMac Pro Forma(1) $1,596 $1,747 £213 £227 $1,929 $2,121 100 100 100 17% 18% 26% 28% 25% 26% 80 80 80 60 60 60 40 40 83% 82% 40 74% 72% 75% 74% 20 20 20

  18. Slide 18: Tremendous Ability To Generate Cash Flow

    Tremendous Ability To Generate Cash Flow(1) Both businesses operate with EBITDA conversion rates of ~50% Verisk Standalone WoodMac Pro Forma(2) $600 80% £120 80% $600 80% $520 65% $462 $450 £90 $450 $405 60% 58% 60% 60% $366 £70 53% 50% £61 51% 49% $300 £60 $300 40% 40% 40% $150 £30 $150 $0 20% £0 2

  19. Slide 19: Combined Company Financial Profile

    Combined Company Financial Profile Verisk Standalone WoodMac Pro Forma $ million £ / $ million $ million GBP USD 2014 Revenue $1,747 £227 $374 $2,121 2014 EBITDA $803 £107 $176 $979 % Margin 46% 47% 47% 46% 2014 Unlevered $405 £70 $115 $520 Free Cash Flow(1) Note: 2014 WoodMac financials converted b

  20. Slide 20: Financing Plans

    Financing Plans • Committed $2.9B bridge financing At Signing • Bridge expected to remain undrawn • Acquisition funded with a combination of: − ~$2B new bank and long-term bonds At Closing − Up to $800 million new equity issuance • Expected to maintain existing investment grade ratings Rapid • Total

  21. Slide 21: Appendix

    Appendix March 10, 2015 verisk SERVE | ADD VALUE | INNOVATE © Analytics

  22. Slide 22: WoodMac provides data analytics to the Upstream (E&P) part of the market

    WoodMac provides data analytics to the Upstream (E&P) part of the market Upstream: Midstream: Downstream: Exploration & Production Gathering & Transportation Refining & Marketing Upstream Midstream Downstream Exploration Refining Marketing and Drilling Production Pipelines Trucks Barges Processing R

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