S&P Global's acquisition to boost private markets intelligence

S&P Global, Inc.'s acquisition of With Intelligence solidifies its leadership in private markets intelligence. The company has demonstrated robust long-term growth, particularly over FY 21-24. This growth is driven by high demand in its data services and comprehensive market offerings, positioning S&P Global for continued success.

S&P Global was founded in 1917 and is headquartered in New York City. It provides financial information and analytics across global markets through six business units: S&P Global Ratings, Market Intelligence, S&P Dow Jones Indices, Commodity Insights, Mobility, and Sustainable. It specializes in services for investors, corporations, governments and financial institutions.

S&P Global has agreed to acquire With Intelligence from Motive Partners for $1.8bn, a move that strengthens its leading position in private markets intelligence. This strategic acquisition will significantly expand S&P Global's data coverage and capabilities across the rapidly growing private markets sector, serving General Partners, Limited Partners and advisors worldwide. By combining With Intelligence’s proprietary data, benchmarks and workflow solutions with S&P Global's expertise, the deal creates one of the industry’s most comprehensive offerings for alternative assets, enhancing value, transparency and innovation for all market participants.

Improved gearing

S&P Global posted strong performance over FY 21-24, achieving a revenue CAGR of 19.6%, reaching $14.2bn in FY24, driven by transaction and subscription revenue growth. EBITDA registered a CAGR of 13.9%, reaching $7.0bn, with margins contracting from 56.8% to 49.0%.

Over FY 21-24, the company experienced a rise in FCF from $2.8bn to $5.3bn. CFO also rose from $3.6bn to $5.7bn. In addition, its gearing improved from 89.8% to 32.1%.

In comparison, Equifax Inc., a local peer, reported a lower revenue CAGR of 4.9% over FY 21-24, reaching $5.7bn in FY 24. EBITDA grew at CAGR of 2.6% to $1.8bn, with margin contracting from 33.1% to 30.9%.

Positive views from analysts 

Over the past 12 months, the company's stock has delivered negative returns of approximately 1.9%. In comparison, Equifax's stock delivered negative returns of around 16.6% over the same period. The company paid an annual dividend of $3.6 in FY 24, resulting in a dividend yield of 0.7%.
S&P Global is currently trading at a P/E of 33.7x, based on the FY 25 estimated EPS of $14.6, which is lower than its 3-year historical average of 41.9x and Equifax's valuation of 37.1x. The company is currently trading at an EV/EBITDA multiple of 20.4x, based on FY 25 estimated EBITDA of $7.8bn, which is lower than its 3-year historical average of 23.6x but higher than that of Equifax (15.4x).

S&P Global is largely liked by analysts who cover it, with 21 having 'Buy' ratings and two having 'Hold' rating for an average target price of $611.4, implying 23.8% upside potential over the current market price.

Consensus estimated EBITDA to rise at a CAGR of 8.6% to $9.0bn with margins expanding by 170bp to 51.4% over FY 24-27. In addition, net profit CAGR of 12.4% to $5.5bn. For Equifax, analysts estimate an EBITDA CAGR of 10.5% and a net profit CAGR of 22.7%.

Overall, S&P Global's strategic acquisition of With Intelligence enhances its leadership in private markets intelligence, while strong financial performance and positive analyst views underscore its growth potential. Despite market volatility, the company's robust data capabilities and innovative offerings position it well for continued success and value creation for stakeholders.

However, the company faces risks including geopolitical tensions, policy uncertainty, macroeconomic volatility, technological disruption, cyber threats, and climate challenges, impacting operations, customer base, credit conditions, and regulatory compliance for FY 25 and beyond.