Vestar Capital Partners has signed an agreement to acquire Institutional Shareholder Services (ISS), a provider of corporate governance services to the global financial community, from MSCI for $364 million. The transaction is expected to close in the second quarter.
“With Vestar’s support, the management team looks forward to advancing ISS‘ long-standing mission of providing world-class corporate governance solutions in an independent and transparent manner,” said Gary Retelny, President of ISS. “Clients will continue to see expanded product offerings, innovative solutions, and the same high level of service that ISS has delivered to institutional investors, corporations, and governance practitioners globally for nearly three decades.”
Institutional Shareholder Services (ISS) is a proxy advisory firm. Hedge funds, mutual funds and similar organizations that own shares of multiple companies pay ISS to advise and often vote their shares. It is the largest such firm, with an approximate 60 percent market share. . MSCI acquired ISS in 2010 as part of its acquisition of RiskMetrics Group. ISS currently has close to 700 employees operating across 15 global offices in 10 countries. The company was founded in 1985 and is headquartered in Rockville, MD (www.issgoverance.com).
“This transaction underscores our belief in the importance of corporate governance and ISS‘ leadership position within the industry. ISS is a market leader in providing corporate governance solutions, with strong client retention rates and a powerful commitment to operating impartially. We fully support the ISS management team and its focus on innovation and providing unrivaled client service,” said Robert Rosner, Founding Partner and Co-President of Vestar.
Vestar specializes in management buyouts and growth capital investments. The firm targets equity investments in the range of $50 million to $150 million in US based middle-market companies with enterprise values ranging from $250 million to $1 billion. Sectors of interest include consumer; diversified industries; healthcare; and financial services. Since the firm’s founding in 1988, the Vestar funds have completed more than 70 investments in companies with a total value of more than $40 billion. Vestar was founded in 1988 and has offices in New York, Boston, and Denver (www.vestarcapital.com).
ISS will operate independently once the transaction is completed and the current ISS executive team will remain in place.
MSCI is a provider of multi-asset class portfolio management tools, primarily to institutional investors, including asset managers, banks, hedge funds and pension funds. The company is headquartered in New York, with research and commercial offices around the world (www.msci.com).
© 2014 PEPD • Private Equity’s Leading News Magazine • 3-21-14