Gregory Meyer – Financial Times – Genscape, a US company that helped lift the curtain on opaque energy markets, is being sold by owner Daily Mail and General Trust in the latest deal to consolidate the business of commodity flows data.
The UK-listed Daily Mail has agreed to sell Genscape for $364m in cash to Verisk, the companies said on Monday. The price was more than 38 times Genscape’s earnings before interest, tax, depreciation and amortisation of about $9m in 2018, a person close to Daily Mail said.
Founded in 1999 and based in the US state of Kentucky, Genscape helped give energy traders a clearer view of energy markets, where success often requires inside knowledge of supply and demand. In one service, a helicopter pilot working for Genscape flew above the tank complex at Cushing, Oklahoma — the delivery point for US crude futures — snapping infrared photos to discern the quantities of oil hidden inside.
Genscape’s other products include natural gas pipeline monitoring and estimates of electricity output derived from sensors placed near power plants.
The availability of data and prices has given hedge funds and banks an edge in markets once dominated by physical producers, refiners and trading houses. Research companies and consultancies have been buying up specialist commodity and energy data providers to meet demand.
IHS Markit acquired the agribusiness intelligence business of London-based Informa in May and in 2016 bought Oil Price Information Service, a price reporting agency. S&P Global acquired energy consultancy PIRA Energy Group in 2016.
New York-listed Verisk, which also provides risk analysis to the insurance sector, acquired the energy consultancy Wood Mackenzie for £1.85bn in 2015. Genscape will become part of Wood Mackenzie.
Neal Anderson, president of Wood Mackenzie, said: “With Genscape joining Wood Mackenzie, our customers will now better understand the defining issues facing key energy commodities — over the long term with Wood Mackenzie’s existing offerings and in the short term through Genscape’s offerings.”
Daily Mail and General Trust acquired Genscape in 2006 for $130m. Paul Zwillenberg, Daily Mail chief executive, has outlined a series of disposals to narrow the group’s portfolio and strengthen its balance sheet. “This transaction marks another major milestone in DMGT’s continued transformation and is in line with our strategy,” Mr Zwillenberg said.