Moody’s Closes on Acquisition of Risk Modeler RMS for $2 Billion

September 16, 2021

Moody’s Corp. reported that it has completed its acquisition of RMS, the climate and natural disaster risk modeling and analytics firm.

In the transaction, originally announced on August 5, 2021. Moody’s paid approximately $2.0 billion (1.425 billion pounds) to acquire RMS from Britain’s Daily Mail and General Trust.

Moody’s said the acquisition will increase its insurance data and analytics business to nearly $500 million in revenue and accelerate the development of the company’s global integrated risk capabilities to address the next generation of risk assessment.

Ratings Firm Moody’s to Acquire Catastrophe Modeler, Analytics Firm RMS for $2 Billion

New York-based Moody’s offers data and analytics to help businesses and organizations manage risks. It has more than 11,500 employees in more than 40 countries.

California-based RMS offers more than 400 risk models covering 120 countries. Its models and analytics help insurers manage global risk from natural and man-made catastrophes including hurricanes, earthquakes, floods, climate change, cyber, and pandemics.

Moody’s funded the transaction through a combination of cash-on-hand and the issuance of new debt.

“Today’s leaders face a complex, interlinked world of risks and stakeholders,” said Rob Fauber, president and chief executive officer of Moody’s, in announcing the deal in August. “In the context of a global pandemic, the climate crisis and increasing cyberattacks, our customers must manage a wider range of risks than ever before.”

Insurance Journal reported this summer that British newspaper Daily Mail and its owner General Trust were in discussions to sell RMS, following a number of third party inquiries. DMGT, which has owned RMS since 1998, said its largest shareholder, Rothermere Continuation, had notified it of a possible cash offer to take it private — if the sale of its insurance risk unit and the U.S. floatation of another subsidiary, online used car business Cazoo, are completed. DMGT companies provide businesses and consumer information, analysis, events, news and entertainment.

“Consistent with our objective of delivering compelling returns for our investors, we have decided that now is the right time to monetise our investment in RMS at a premium valuation. Moody’s is ideally positioned to drive the next stage of RMS’s growth and deliver revenue synergies,” DMGT CEO Paul Zwillenberg commented in announcing the deal.

Karen White, RMS chief executive officer, called Moody’s is an “exceptional fit” for RMS and its customers. “Global risks are now more complex, connected and systemic. Climate change and catastrophic events like extreme weather, pandemics and cyberattacks have broader and more harmful impacts across virtually all industries. We share the vision to bring a global, integrated risk assessment platform to our markets with the goals of deeper, more sophisticated risk insights and greater global resiliency,” White said.

Topics Mergers Risk Management

Was this article valuable?

Here are more articles you may enjoy.