WASHINGTON (dpa-AFX) - Verisk Analytics Inc. (VRSK), a leading data analytics provider, and Veritas Capital, a private equity firm, announced the signing of a definitive agreement under which an affiliate of Veritas Capital has agreed to acquire Verisk's healthcare services business, Verisk Health, for $820 million.
The transaction is subject to regulatory approvals and other customary closing conditions and is expected to close by June 30, 2016.
The total purchase price is subject to typical adjustments for, among other things, the working capital of the business at closing. The purchase price consists of $720 million of cash consideration, a $100 million long-term subordinated promissory note with interest paid in kind, and other contingent consideration. Verisk Analytics estimates after-tax proceeds of approximately $675 million, of which about $600 million will be received at closing.
In the near term, Verisk Analytics intends to use a portion of the cash proceeds to repay its revolver drawings. Verisk remains committed to reaching its stated leverage target by the end of 2016. Over time, Verisk anticipates that the majority of the proceeds will be applied to its long-standing capital allocation priorities, including acquisitions and share repurchases.
Upon closing, Verisk Health will be renamed and will operate as an independent company at its current headquarters in Waltham, Massachusetts.
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