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The owner of the Daily Mail newspaper has struck a deal to sell its disaster risk modelling business RMS to US rating agency Moody’s for £1.43bn, paving the way for the Rothermere family to take the UK publisher private.
RMS is one of the world’s most influential providers of analytics for reinsurers, and property and casualty insurance companies, and has been owned by DMGT since 1998.
But the Silicon Valley-based business is one of several disparate assets that DMGT has exited, from financial publisher Euromoney to property site Zoopla, as it has sought to refocus.
The disposal brings closer a possible offer for DMGT, whose other titles include Metro and The i newspapers and New Scientist magazine, by executive chair Jonathan Harmsworth, the Viscount Rothermere, and his family.
DMGT said last month that the Rothermeres would consider a bid if the media group successfully offloaded RMS, among other conditions. Shareholders would receive a special dividend of about 610p a share, as well as 251p for each DMGT share.
New York-listed Moody’s said the acquisition would bolster its data and analytics business to nearly $500m in annual revenues, helping clients to “manage a wider range of risks than ever before”, highlighting the Covid-19 pandemic, climate change and cyber attacks.
“Today’s leaders face a complex, interlinked world of risks,” said Rob Fauber, Moody’s chief executive. Karen White, RMS chief executive, said Moody’s was an “exceptional fit”.
A bid for DMGT by the Rothermeres is also contingent on the completion of a listing via a special purpose acquisition company of the online used car retail business Cazoo, in which the group has a 20 per cent stake.
It also depends on an agreement being struck with trustees of DMGT’s three pension schemes, to ensure that they are not “adversely affected” by the reorganisation.
To compensate trustees for the sale, given that DMGT will be materially smaller when it completes, DMGT plans to pay about £60m into an escrow account for the pension schemes.
DMGT said it expected the sale to result in costs of about £210m, including bonus scheme payouts to RMS executives, given the changed ownership, tax charges and disposal fees.
The sale is expected to complete next month. Paul Zwillenberg, the London-based media company’s chief executive, said the disposal “marks another major milestone in DMGT’s transformation”.
The deal will leave DMGT with interests in property information, events and venture capital, as well as its newspaper businesses.
The Rothermeres have an economic interest in DMGT of 36 per cent, but the company has a dual shareholding structure and Harmsworth has owned all voting shares since 2013. Any deal recommended to shareholders with his backing will be approved.
Lazard advised DMGT on the RMS sale, while Centerview Partners advised Moody’s.
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