The operator of the Frankfurt Stock Exchange, Deutsche Börse, announced on Tuesday evening the repurchase of 80% of the shares of the American company advising shareholders, Institutional Shareholder Services (ISS), valued at nearly 2 billion euros.
The German group acquires “In partnership with the current management (of ISS) and (the fund) Genstar Capital” the majority of the target “On the basis of a (global) valuation of 2.28 billion dollars (1.93 billion euros)”, he said in a press release. ISS delivers recommendations to institutional investors for voting at shareholders’ meetings of listed companies. Its emphasis is now on compliance by companies with environmental and social criteria and governance (ESG). “ISS’s ESG expertise and range of data-side services perfectly complement Deutsche Börse’s business model” whose services cover the chain of securities trading operations and data analysis, said Deutsche Börse CEO Theodor Weimer.
15 million euros per year of operating profit by 2023
ISS should generate in 2020 a turnover of more than 280 million dollars, with an average growth of 5% per year expected until 2023. Thanks to the synergies generated by integrating ISS, Deutsche Börse expects an operating profit (Ebitda) additional € 15 million per year by 2023.
The acquisition is expected to close in the first half of 2021, subject to the required regulatory approvals. This announcement comes two days before the presentation, Thursday, by Deutsche Börse of a new strategic plan for 2023. In October, the Eschborn group, in the suburbs of Frankfurt, was beaten by its pan-European competitor Euronext , which already manages, among others, the Paris Stock Exchange, for the acquisition of the Milan Stock Exchange.