Verisk Nears Deal to Sell Energy-Analytics Unit


Verisk Analytics Inc.


VRSK 2.67%

has struck a deal to sell its energy-consulting arm, Wood Mackenzie, to private-equity firm Veritas Capital in a transaction valued at $3.1 billion or more.

The transaction, expected to be unveiled later Monday, comes after the company kicked off a strategic review in 2021, Chief Executive

Lee Shavel

told The Wall Street Journal. Veritas could pay up to an additional $200 million depending on how well it does on the investment, he said.

Jersey City, N.J.-based Verisk, with a market value of some $28 billion, provides data-driven-analysis tools for the insurance and energy industries. Its services are meant to help with insurance underwriting and claims, economic forecasting and assessing geopolitical risks. The deal will allow Verisk to focus exclusively on insurance, Mr. Shavel said.

Verisk acquired Edinburgh-based Wood Mackenzie for £1.85 billion (then $2.8 billion) in 2015, in a bid to boost its international operations and widen its product offering. It was part of a string of acquisitions of data businesses to allow Verisk to build upon its base of insurance customers.

Mr. Shavel joined Verisk in 2017, first serving as chief financial officer until he was promoted to CEO in late May of this year. Last year, management kicked off a portfolio review meant to sharpen Verisk’s focus on its core growth engines, chiefly its insurance business.

So far this year, Verisk has already announced two deals as part of the push.

In January, it agreed to sell its 3E business, which had been part of its energy and specialized markets segment, to New Mountain Capital, a New York-based investment firm, for at least $630 million. In February, it announced a deal to sell its financial-services business, Verisk Financial Services, to

TransUnion

for $515 million.

In March, New York-based hedge-fund firm D.E. Shaw & Co. issued a public letter to Verisk shareholders urging the company to commit to becoming a pure-play insurance business. (Verisk and D.E. Shaw had been holding private talks since October 2021.)

The activist built a significant stake in Verisk and called on it to continue selling noncore businesses. It also asked for several governance changes.

Verisk responded by nominating three new independent directors to its board and vowing to pursue some sort of transaction for its energy arm.

Mr. Shavel said investors more recently started to sour on Verisk’s involvement in businesses outside of insurance. The sale of Wood Mackenzie, along with the other recent transactions, should bring the company “back to our roots,” he said.

Verisk plans to use the proceeds to pay down debt and pursue share repurchases. It is expected to report third-quarter earnings after the market closes on Tuesday.

Write to Lauren Thomas at lauren.thomas@wsj.com

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