IHS Inc. (NYSE:IHS), the leading global source of information and
analysis, has acquired Invention Machine for approximately $40 million.
Invention Machine is a leader in semantic search technology that
uncovers relevant insights held within a wealth of internal and external
knowledge sources, transforming the underlying data into actionable
intelligence. Their patented semantic question-answering software engine
leads engineers and knowledge workers to information quickly and enables
them to rapidly digest it to make better decisions.
As previously announced, IHS also has completed the closing of its
acquisition of GlobalSpec Inc., from Warburg Pincus LLC for $135
million. GlobalSpec is the leading specialized vertical search, product
information and global access point providing critical digital
information tied to key Product Engineering and Design workflows for
seven million engineers.
IHS senior management will host a conference call and webcast to discuss
the GlobalSpec and Invention Machine acquisitions, along with updated
guidance for FY2012, on July 11, 2012 at 4:30 p.m. EDT. To hear the live
event, visit the IHS website at http://www.ihs.com/Investor-Relations/
and log on at least 15 minutes prior to the start of the webcast.
“The acquisitions of Invention Machine and GlobalSpec present a unique
opportunity for IHS to transform our existing engineering specifications
and standards business to long-term double-digit growth, and accelerate
the IHS Product Design business by increasing the value we offer to
engineers, researchers and scientists by connecting innovation to
knowledge workers,” said Jerre Stead, IHS chairman and chief executive
officer. “With Invention Machine’s Goldfire as the front-end, we will
bring together all IHS content, insight and tools into an innovative
solution that will address many of the unsolved problems facing
engineers. This will enable greater productivity, accuracy and design
quality, and help customers accelerate innovation and deliver superior
products and services.”
Invention Machine’s Goldfire product is the decision engine built on top
of a patented semantic search engine that connects engineers and
innovation and knowledge workers, on-demand, to one another and to the
internal and external knowledge and trends needed to develop, maintain
and produce breakthrough products and services. Semantic search engines
understand the meanings and relationships of words, and can provide more
relevant results than traditional text-based search engines.
IHS President and Chief Operating Officer Scott Key said: “Invention
Machine is an excellent strategic fit for IHS and is a critical
component of the evolution and transformation of the Product Design
business. Invention Machine provides a software tool that lays on top of
IHS and GlobalSpec content, as well as a customer’s own internal and
external content, to enable customers to rapidly digest information and
make better decisions.
“The acquisitions will allow IHS to provide a revolutionary knowledge
management solution that will seamlessly access IHS products, external
content and a customer’s internal information. It gives us the
opportunity to further expand within target customers by creating new
products for quality, standards applicability and knowledge management.”
Headquartered in Boston, Invention Machine employs approximately 100
colleagues and also has offices in: Minsk, Belarus; London; Frankfurt;
Paris, and Tokyo.
GlobalSpec has a global user base of more than seven million registered
users – a user community that grew by 500,000 new registrants during
2011. It provides registered users with a domain-specific search engine
for more than 3,500 current product, service and technology vertical
categories, a vibrant community of engineers helping other engineers
solve important problems, and more than 70 product and industry
e-newsletters that help engineers and related professionals perform
their key job tasks with the highest levels of accuracy and productivity.
“GlobalSpec’s global community of more than seven million engineers will
allow us to market our solutions to a large segment of engineers around
the world who currently do not yet use IHS services,” Key said. “We will
leverage IHS global scale in sales and market presence to create large
strategic synergies and revenues as we elevate our Product Design
business to accretive growth rates and margins."
GlobalSpec is headquartered in East Greenbush, N.Y. and employs
approximately 230 people.
Outlook (forward-looking statement)
For the year ending November 30, 2012, IHS is increasing both its
revenue and its adjusted EBITDA guidance and expects:
-
All-in revenue in a range of $1.548 to $1.598 billion; and
-
All-in adjusted EBITDA in a range of $496 to $512 million.
IHS expects adjusted earnings per share (EPS) between $3.88 and $4.01
per diluted share, unchanged since its last guidance update due to the
acquisition-related increases in interest expense and depreciation and
amortization expense.
IHS is updating its 2012 guidance solely to incorporate the inclusion of
GlobalSpec, Invention Machine and the previously announced acquisition
of CyberRegs®, as well as to reflect current currency rates.
This update assumes no further currency movements, acquisitions, pension
mark-to-market adjustments or unanticipated events.
Use of Non-GAAP Financial Measures:
Non-GAAP results are presented only as a supplement to the financial
statements based on U.S. generally accepted accounting principles
(GAAP). The non-GAAP financial information is provided to enhance the
reader's understanding of our financial performance, but no non-GAAP
measure should be considered in isolation or as a substitute for
financial measures calculated in accordance with GAAP. Reconciliations
of the most directly comparable GAAP measures to non-GAAP measures, such
as Adjusted EBITDA and Adjusted earnings per diluted share, are provided
with the schedules to our quarterly earnings releases. Our most recent
non-GAAP reconciliations were furnished as an exhibit to a Form 8-K on
June 18, 2012, and are available on our website (www.ihs.com).
EBITDA is defined as net income plus or minus net interest plus income
taxes, depreciation and amortization. Adjusted EBITDA further excludes
(i) non-cash items (e.g., stock-based compensation expense and non-cash
pension and postretirement expense) and (ii) items that management does
not consider to be useful in assessing our operating performance (e.g.,
acquisition-related costs, restructuring charges, income or loss from
discontinued operations, and gain or loss on sale of assets). Adjusted
earnings per diluted share exclude similar items as Adjusted EBITDA.
None of these non-GAAP financial measures are recognized terms under
GAAP and do not purport to be an alternative to net income as an
indicator of operating performance or any other GAAP measure.
Management uses these non-GAAP measures in its operational and financial
decision-making, believing that it is useful to eliminate certain items
in order to focus on what it deems to be a more reliable indicator of
ongoing operating performance and our ability to generate cash flow from
operations. As a result, internal management reports used during monthly
operating reviews feature the Adjusted EBITDA and Adjusted earnings per
diluted share metrics. Management also believes that investors may find
non-GAAP financial measures useful for the same reasons, although
investors are cautioned that non-GAAP financial measures are not a
substitute for GAAP disclosures. EBITDA, Adjusted EBITDA, and Adjusted
earnings per diluted share are also used by many of our investors,
research analysts, investment bankers, and lenders to assess our
operating performance. For example, a measure similar to Adjusted EBITDA
is required by the lenders under our term loan and revolving credit
agreement.
Because not all companies use identical calculations, our presentation
of non-GAAP financial measures may not be comparable to other
similarly-titled measures of other companies. However, these measures
can still be useful in evaluating our performance against our peer
companies because management believes the measures provide users with
valuable insight into key components of GAAP financial disclosures. For
example, a company with greater GAAP net income may not be as appealing
to investors if its net income is more heavily comprised of gains on
asset sales. Likewise, eliminating the effects of interest income and
expense moderates the impact of a company's capital structure on its
performance.
All of the items included in the reconciliation from net income to
Adjusted EBITDA are either (i) non-cash items (e.g., depreciation and
amortization, stock-based compensation, non-cash pension and
postretirement expense) or (ii) items that we do not consider to be
useful in assessing our operating performance (e.g., income taxes,
acquisition-related costs, restructuring charges, income or loss from
discontinued operations, and gain or loss on sale of assets). In the
case of the non-cash items, management believes that investors can
better assess our operating performance if the measures are presented
without such items because, unlike cash expenses, these adjustments do
not affect our ability to generate free cash flow or invest in our
business. For example, by eliminating depreciation and amortization from
EBITDA, users can compare operating performance without regard to
different accounting determinations such as useful life. In the case of
the other items, management believes that investors can better assess
operating performance if the measures are presented without these items
because their financial impact does not reflect ongoing operating
performance.
IHS Forward-Looking Statements:
This release may contain forward-looking statements as defined in the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements are statements that are not historical facts. Such statements
may include financial projections and estimates and their underlying
assumptions, statements regarding plans, objectives and expectations
with respect to future operations, products, and services, and
statements regarding future performance. Forward-looking statements are
generally identified by the words "expect," "anticipate," "believe,"
"intend," "estimate," "plan" and similar expressions. Although IHS and
its management believe that the expectations reflected in such
forward-looking statements are reasonable, investors are cautioned that
forward-looking information and statements are subject to various risks
and uncertainties--many of which are difficult to predict and generally
beyond the control of IHS--that could cause actual results and
developments to differ materially from those expressed in, or implied or
projected by, the forward-looking information and statements. These
risks and uncertainties include those discussed or identified by IHS
from time to time in its public filings. Other than as required by
applicable law, IHS does not undertake any obligation to update or
revise any forward-looking information or statements. Please consult our
public filings at www.sec.gov
or www.ihs.com.
About IHS (www.ihs.com)
IHS (NYSE: IHS) is the leading source of information, insight and
analytics in critical areas that shape today’s business landscape.
Businesses and governments in more than 165 countries around the globe
rely on the comprehensive content, expert independent analysis and
flexible delivery methods of IHS to make high-impact decisions and
develop strategies with speed and confidence. IHS has been in business
since 1959 and became a publicly traded company on the New York Stock
Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS employs
more than 6,000 people in more than 30 countries around the world.
IHS is a registered trademark of IHS Inc. All other company and
product names may be trademarks of their respective owners. Copyright ©
2012 IHS Inc. All rights reserved.
About Invention Machine (www.InventionMachine.com)
Invention Machine is the leader in semantic research technology that
unlocks decisions hidden in data. The Company’s patented semantic
question-answering engine empowers informed decision-making helping
businesses accelerate innovation, increase productivity and deliver
superior products. Over the past decade, the majority of the Global 2000
have used Invention Machine’s innovation intelligence platform,
Goldfire, to find new markets and bring about breakthrough products and
solutions.
