£500,000 windfall for staff

Data analytics giant eyes growth

MORE than 200 staff at an Edinburgh-based oil and gas consultancy firm are in line for windfalls averaging £500,000 after a giant US corporation agreed to buy their firm.

The cash takeover of Wood Mackenzie by New Jersey-based Verisk Analytics will pave the way for massive payouts to employees who own shares in the business.

Half of Wood Mackenzie’s 1,000 employees work in Scotland, with around 50 per cent of these shareholders owning about one-quarter of the company. They will receive the same payment per share as the majority shareholder.

Senior directors led by chief executive Stephen Halliday look to be in line to collect millions of pounds each.

It is the second bumper payout in less than three years for many employee shareholders – 340 received dividends averaging £250,000 when a US investment house took control of Wood Mackenzie in a £1.1 billion deal in 2012.

THE US giant that is buying Wood Mackenzie has highlighted its enthusiasm for the oil and gas consultancy’s Edinburgh-based operation and management and emphasised the deal is not being driven by cost-cutting considerations.

Verisk Analytics announced it had agreed to buy Wood Mackenzie for £1.85 billion cash in a deal that will result in employee shareholders in the firm getting payouts worth an average £500,000 each.

Wood Mackenzie’s chief executive Stephen Halliday and boardroom colleagues Brian Aird and Paul Gregory look to be in line to collect millions each. All have significant holdings in the firm.

Wood Mackenzie had been reported to be looking at a stock market flotation valuing it at £2bn but was also thought to have had approaches from potential trade buyers including Verisk.

New Jersey-based Verisk told analysts Wood Mackenzie would play a key role in the company’s push for growth in international markets.

“We are thrilled about adding Wood Mackenzie to the Verisk family,” the information and data analysis firm’s chief executive Scott Stephenson told analysts. “The company has a great culture and an outstanding leadership team.”

He added: “The Wood Mackenzie team will remain intact and continue to lead as part of the Verisk family.”

Wood Mackenzie employs 500 people in Scotland out of a global total of 1,000.

Mr Stephenson said the company had developed a market leading position in the lucrative market to provide information on the global oil and gas market.

This will allow Verisk to expand beyond its core markets of health care and financial services.

With a blue chip client base which includes oil and gas giants and banks, Wood Mackenzie has generated strong growth in profits.

Mr Stephenson noted that Wood Mack, as it is known, has remained very profitable during periods of low oil prices.

He said a key attraction of the deal was the prospect of accessing the kind of product development expertise Wood Mack has devel- oped, based on a deep relationship with customers.

Asked about the scope for squeezing cost savings out of the enlarged business, Mr Stephenson said: “I would not place a great deal of emphasis on cost synergies.

“This is really about expansion... about leveraging capabilities and expertise.”

While the company did not make an explicit commitment to retain Wood Mackenzie’s Edinburgh headquarters, Mr Davidson’s comments indicate it will be unlikely to want to disturb arrangements that have been working well.

He said an important part of Wood Mackenzie’s appeal is that it has offices and customers in many areas of the world.

Finance chief Marjk Anquillare highlighted the attractions of the fact Wood Mackenzie is registered in the UK for tax purposes.

“Given Wood Mack’s 23 per cent effective tax rate this business generates nearly 30 per cent more free cash flow than it did when it was domiciled in the US,” he said.

Mr Halliday said: “This combination is a natural home for the business we’ve built over the years.”

Verisk has bought out US private equity house Hellman & Friedman and acquired a controlling interest in Wood Mack in 2012 in a deal that valued the business at £1.1bn.

Employees retained a 24 per cent holding after that deal.

Wood Mack was bought by management from Germany’s Deutsche Bank for £26m in 2001.