New York, NY – Last week, Englewood, Colorado-based global research, consulting, and analytics provider IHS, Inc. acquired PFC Energy, a well-established provider of consulting and information services for the oil and gas value chain. Terms of the deal were not disclosed.
Rationale for the Deal
The deal to acquire PFC Energy has been part of an aggressive campaign by IHS to acquire a number of key properties in wide range of industries over the past few years. Click here for a list of the firm’s acquisitions in the past few years.
IHS management has acknowledged that though the company has successfully built profits and cash flow, they continue to focus on growth. The firm is focusing its growth strategy in four sectors – the market for information and analytics in energy, in chemicals, in electronics and in transportation.
In fact, in the past six months, IHS has purchased four additional energy-related analysis and consulting firms, not to mention the acquisition of Purvin & Gertz, a well-established oil research company, a little over two years ago.
“The acquisition of PFC Energy brings energy information and research depth and strengthens our presence in North America, Europe, Asia Pacific and the Middle East,” said Scott Key, IHS president and chief executive officer. “For more than 25 years, PFC Energy has built a solid reputation as an integrated information, research and advisory firm covering the oil and gas value chain. This gives us the opportunity to expand the IHS presence in high-growth markets, and to leverage the skills and expertise of regionally located research colleagues who will support the growth of critical IHS energy solutions.”
“With PFC Energy, we join forces with a company that already serves a blue-chip client base composed of leading oil, gas and financial companies,” Key said. “Their market analysis and models integrate seamlessly with our capabilities, enabling IHS to accelerate our current organic development across the entire oil and gas value chain.”
Background on PFC Energy
Founded in 1984, PFC Energy is a global consulting firm specializing in the oil and gas industry. Its clients are oil and gas operators, national oil companies, service companies, investors, governments and other stakeholders.
PFC Energy has focused exclusively on the energy sector, covering all phases of the energy value chain, and the assets and activities of key countries and companies. PFC was a private partnership with more than 130 consultants and other professional staff, based in Washington, D.C. and with offices in Houston, Kuala Lumpur, Moscow, Paris, Beijing and Singapore.
Impact on IHS Share Price
IHS’s share price has done quite well over the past few years as a result of the firm’s acquisition binge, more than tripling since late 2008 to around $103, valuing the company at more than $6.75 billion.
But last Thursday IHS’ share price slid sharply after second-quarter revenue came in below analysts’ expectations, with revenue growth slowing primarily in its non-subscription activities. This includes consulting, software licensing, and events which grew a modest 4% in the second quarter. This non-subscription business accounted for 24% of IHS’s revenue last year.
Overall IHS’ revenue rose 8% in the second quarter to $418.1 million, missing the $423.3 million total that analysts had estimated. IHS shares fell 7% to close at $100.22 on the New York Stock Exchange.
IHS currently employs more than 6,700 employees in 31 countries around the world, the company said.