Research firm Morningstar Inc. is taking full control of environmental, social and governance (ESG) specialist Sustainalytics.
Chicago-based Morningstar announced it will take 100% ownership of Sustainalytics in a deal that values the ESG research firm at €170 million.
In 2017, Morningstar took a 40% stake in the global ESG research firm. The deal to buy the remaining 60% is expected to close in the third quarter.
The deal includes €55 million in cash at closing, with additional payments in 2021 and 2022 based on a multiple of Sustainalytics’ revenues.
“With this acquisition, Morningstar plans to continue to invest in Sustainalytics’ existing business while also further integrating ESG data and insights across Morningstar’s existing research and solutions for all segments, including individual investors, advisors, private equity firms, asset managers and owners, plan sponsors, and credit issuers,” a statement from Morningstar said.
Since 2016, Morningstar and Sustainalytics have collaborated to provide investors with new analytics, including the industry’s first sustainability ratings for funds based on Sustainalytics’ company-level ESG ratings.
Morningstar plans to continue to invest in Sustainalytics’ existing business while also further integrating ESG data and insights into its own platform, a release said.
All of Sustainalytics’ 650 employees in 16 locations around the world are expected to join Morningstar, but will remain under the existing Sustainalytics leadership team.
Morningstar said that it will fund the transaction with a mix of cash and debt.