Caixin Global Extends Reach With $180 Million International Data-Provider Purchase
Caixin Global, the overseas arm of leading Chinese financial news and data provider Caixin Media, and Citic Capital will buy the international business information unit of Britain's Euromoney for $180.5 million, in one of the biggest offshore purchases ever by a mainstream Chinese media company.
The deal also represents the biggest purchase to date for Caixin, as the Chinese company aspires to build up a global news and information platform to rival similar offerings from companies like Bloomberg, Thomson Reuters and the Economist.
The agreement will see Caixin and local private equity giant Citic Capital Holdings Ltd. team up to buy Global Market Intelligence Division (GMID), a Hong Kong-based company that provides global financial information and data in over 15 languages, with a focus on emerging markets. GMID's two main units are CEIC and EMIS. The purchase is expected to close in the first half of this year.
Hong Kong-based Caixin Global said it will leverage the resources of CEIC and EMIS to enhance its own products for the China market, while also working to expand the Hong Kong company's product offerings from a current focus on desktop to also include more mobile-oriented devices.
"We are optimistic about GMID's business and future," said Caixin Media Publisher Hu Shuli. "Caixin will further leverage the rising global influence of China's economy, and combine state-of-the-art technology with its authoritative information service and data offerings. We will join forces together with GMID to provide indispensable data and insight for overseas and domestic financial industry professionals and stakeholders."Euromoney said it will get about $145 million in gross proceeds from the sale. "This will leave Euromoney in a net cash position at completion and will provide Euromoney with further capital to recycle towards its main investment themes," the company said in a statement to the London Stock Exchange.
Last fall, Euromoney Institutional Investor Group first announced its intent to explore strategic options for CEIC and EMIS. The two units' parent, GMID, reported revenue in 2016 of about $52.7 million and earnings before interest, taxes, depreciation and amortization (EBITDA) of $14.5 million, it said at the time.
"I am tremendously excited about the opportunities that this transaction will afford to our business, customers and staff," said Aloisio Parente, CEO of GMID. "Both CEIC and EMIS have traditionally had a strong presence in and understanding of the key developing markets. I am certain that the relationship with CITIC Capital and Caixin will help us to further enhance the value and reach of our services in all parts of the world."
The deal marks the largest overseas purchase by a traditional Chinese media company. Most of those come from a state-run background, whereas Caixin is privately-owned and more entrepreneurial, funded by private backers including CMC Capital Partners. The company made headlines last year when it became the first major Chinese media outlet to roll out a paywall for some of its news and related services, following a pattern used by big Western financial media including the Wall Street Journal and Financial Times.
The deal is also part of a nascent string of similar purchases of foreign news and information assets by Chinese companies. In 2016, a China-linked group purchased U.S. car industry data specialist J.D. Power and Associates for $1.1 billion, and last year China Oceanwide Holdings Group purchased International Data Group (IDG), a U.S.-based provider of data and research on high-tech industries and publisher whose properties include PCWorld.
The purchase also marks the latest in a string of global investments by Citic Capital, an arm of one of China's most successful financial conglomerates. Last November the company teamed up with the Asia arm of Baring Private Equity to purchase the Wall Street English educational unit from British publishing giant Pearson Plc for $300 million. Citic Capital also teamed up last year with U.S. private equity giant Carlyle to buy a majority of McDonald's self-owned China and Hong Kong store operations for about $2.1 billion.
"We are very excited to make this investment in CEIC and EMIS, which are world-class platforms for macro-economic and business information," said Citic Capital Chairman Zhang Yichen. "Together with Caixin, we look forward to working with the management team to continue growing the business and developing its global customer base."
Contact reporter Yang Ge (firstname.lastname@example.org)
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