Morningstar has reached an agreement to acquire full ownership of Sustainalytics, a leading provider of independent research on environmental, social and governance (ESG) ratings.
It currently has a 40% ownership interest in Sustainalytics, which it acquired in 2017, and expects to close the deal to acquire the remaining 60% in the third quarter of this year.
Morningstar bases its sustainability ratings for mutual funds and ETFs on Sustainalytics’ company-level ESG analysis, which includes data on 40,000 companies worldwide and ratings on 20,000 companies and on 172 countries.
Morningstar’s current ESG ratings, based on Sustainalytics analysis, accounts for material ESG risks among industries as well as a company’s ESG risk characteristics within its sector.
Its latest deal to acquire Sustainalytics’ shares involves a cash payment at closing of approximately 55 million euros, equivalent to nearly $60 million, plus additional cash payments in 2021 and 2022 based on a multiple of Sustainalytics revenues for the prior two years.