Morningstar acquires full ownership of Sustainalytics for €55m

Morningstar acquisition of Sustainalytics : Morningstar, a US-based provider of independent investment research, has closed its previously announced €55 million deal to acquire full ownership of Sustainalytics, a Dutch environmental, social, and governance (ESG) ratings and research firm.

The transaction, which was announced in April 2020, saw Morningstar acquire the remaining 60% stake in the Dutch company that provides data on 40,000 companies across the world and ratings on 20,000 firms and on 172 countries.

The US company had agreed to make additional cash payments in 2021 and 2022 based on a multiple of Sustainalytics’ fiscal year revenues for 2020 and 2021. The enterprise value of Sustainalytics has been estimated at €170 million.

Sustainalytics’ security-level ESG Risk Ratings are used as a benchmark among institutional asset managers, pension funds, and other financial market participants which integrate ESG factors into their investment processes and decision-making.

The ESG research and ratings of Sustainalytics are said to be relied by investors across the world and also support various indexes and sustainable investment products, which includes Morningstar’s Sustainability Rating for funds and Morningstar Indexes.

Commenting on Morningstar acquisition of Sustainalytics, Kunal Kapoor – CEO of Morningstar said: “Investor demand for stakeholder capitalism is driving a profound transformation in the global investing landscape. We’re excited to have our sights on this next horizon alongside Sustainalytics, a leader that has been on this road since the beginning.

“Together, we will lead investors of all types through this transition, empowering them with ESG insights that allow for the personalization of portfolios across asset classes.”