IHS Inc. has agreed to acquire privately held R.L. Polk & Co., the owner of used-car history provider Carfax and a leading provider of auto industry data, in a deal valued at $1.4 billion.
IHS, in a statement today, said the purchase will be funded by 10 percent of its equity, with the rest coming from cash on hand, cash from an existing line of credit and a new bank term loan. The companies did not give a time frame for closing the deal. The deal was first disclosed late Sunday.
R.L. Polk -- which has been family-owned for more than 140 years -- said in March that it was exploring its options, including a sale of the company. Besides Carfax, Polk traditionally has been known for its vehicle registration data, sales forecasts and tracking of owner loyalty.
CEO Stephen Polk said in an interview today that he's committed to making this transition successful for IHS and R.L. Polk's employees.
Polk, CEO since 1994, said he isn't sure what his role will be after the sale is approved. The approval process should take around 4 to 6 weeks, he said.
"I've gotten so many calls for many years from people who are interested in our business. This was the time to find out how serious people really were and that's what we found out with IHS," said Polk, who's the last family member still involved with the company. "We entered in this process knowing we didn't have to do anything, which is the best place to be."
It is unclear if IHS will continue to use the Polk name after the deal closes.
"We always evaluate brand names as part of the integration planning process. As is our normal approach, we will work this out as part of post-close planning with the Polk team," said Dan Wilinsky, senior director of global media relations for IHS, via email this morning.
In other words, IHS could decide to trade on the well-known Polk name rather than operate under the IHS brand, or it could drop Polk's moniker in favor of something else.
When asked how he felt about a possible name change, Stephen Polk said he knows IHS will do whatever is best for business.
IHS CEO Scott Key said in a conference call today that the acquisition is the final link in connecting the automotive value chain. Key said Polk's data will be "highly complementary" to IHS Automotive's forecasts and outlooks.
"Insight and analytics derived from Carfax will be critical to driving value and new insights in the automotive supply chain." Key said. IHS forecasts indicate that "automotive is a high growth industry for decades to come."
Global information company
In March, Polk said it had retained Evercore Partners, a New York investment banking firm, to "explore strategic growth opportunities," including a possible sale of the company.
IHS calls itself a "global information company" and owns businesses including defense industry publication Jane's, energy research firm CERA and economics firm Global Insight.
Polk generated revenue of $401 million in 2012. Overall, 75 percent of Polk's revenue is recurring in nature.
Carfax generates 60 percent of Polk's revenue, according to an IHS presentation, while the Polk division accounts for the other 40 percent.
R.L. Polk CEO Stephen Polk said in a statement that IHS' global reach will expand the "unique and vital role" his company has played in the auto industry.
IHS said the acquisition creates a global automotive information supply chain connecting all major segments of the auto industry.
"The acquisition of R.L. Polk brings extensive and complementary information and analytical solutions that would establish IHS as a vital strategic partner of the global automotive value chain. R.L. Polk has a long history of providing critical information to the automotive industry," Key said in the statement.
"The combination with IHS Automotive creates a comprehensive capability that will significantly enhance customers' insights and decision processes across the full vehicle life cycle with analytics from product planning through manufacturing, sales and into automotive aftermarkets."
