Investment data and research provider Morningstar is acquiring full ownership of Sustainalytics, the ESG ratings agency. Morningstar already owned a 40%-stake in the company.
The transaction includes a cash payment of €55 million and additional cash payments in 2021 and 2022 based on a multiple of Sustainalytics› 2020 and 2021 fiscal year revenues. Based on the upfront consideration, Morningstar estimates the enterprise value of Sustainalytics to be €170 million. The closing of the transaction is expected to occur early in the third quarter of 2020.
‘By coming together, Morningstar and Sustainalytics will fast-track our ability to put independent, sustainable investing analytics at every level – from a single security through to a portfolio view – in the hands of all investors,› said Morningstar Chief Executive Officer Kunal Kapoor. ‹Morningstar helped democratize investing, and we will do even more to extend Sustainalytics› mission of contributing to a more just and sustainable global economy,’ he added.
ESG Risk Ratings
Netherlands-based Sustainalytics has been providing ESG data to investors, banks and companies globally for more than 25 years. The firm is best known for its ESG Risk Ratings – which are integrated into institutional investment processes and underpin numerous indexes and sustainable investment products. Sustainalytics offers data on 40,000 companies worldwide and ratings on 20,000 companies and on 172 countries. The company employs 650 people in 16 offices across the globe.
Since 2016, when Morningstar acquired its first 40% stake in Sustainalytics, the two companies have already been cooperating to create sustainability rating for funds, rooted in Sustainalytics› company-level ESG ratings; a global sustainability index family; and a large span of sustainable portfolio analytics that includes carbon metrics and controversial product involvement data.