AI is accelerating the commoditisation of so much news and information and nobody needs reminding of the soaring value of subscription-funded data services. But the “must have” information claimed by many B2B publishers is often less “exclusive” than it seems – and will increasingly be exposed by the voracious new tech. The survivors and winners will, inevitably, be those whose data really is proprietary and becomes indispensable to user workflow systems: data they can’t do without.
Those are the prized resources which will attract increasingly high valuations.
Nowhere is this clearer than in the Price Reporting Agencies (PRA) which provide the “official” prices governing trading in the world’s commodity markets.
PRAs are the exclusive information providers, most of which began as specialist news businesses and still often employ journalists to research commodity prices. They now facilitate transactions and generate additional revenue from consulting and research. Although more than 50% of the revenue of these pricing companies comes from oil and gas, their profits are soaring on the back of new energy sources and processes.
It’s 100 years since Ohio journalist Warren Platt tapped into the information hunger of the exploding oil industry and created Platts, the world’s first PRA (now owned by S&P Global) which has operated across the world’s commodity and resources markets ever since.
Even in a (slowly) decarbonising world, the price of oil – specifically the two leading price benchmarks, Brent and West Texas Intermediate – are probably the most monitored stats, with price changes driving the capital flows of oil exporting countries and of inflation everywhere else. A change in the methodology for calculating Brent crude, uncontroversial in itself, last year underlined how a single commercial operator – Platts – is responsible for one of the world’s most influential statistical benchmarks.
Previously owned by McGraw Hill, it has long been sensitive about the egregious profitability of its dominant PRA. Of course. But we have some first-hand evidence.
Former Platts president Larry Neal has disclosed (on his Linkedin profile, of all places) that: During 2009-16, the company achieved “15+% annual revenue growth, expanding revenues from $260mn to $750mn, grew EBITDA six-fold, and more than doubled EBITDA margins. It outpaced Platts’ nearest competitors’ growth 3x and increased enterprise value nearly 7x…”
No wonder that others took the hint, including Platts’ main rival Argus Media (formerly Petroelum Argus) which was launched by former Reuters journalist Jan Nasmyth, just ahead of the 1973 Arab oil embargo. The $450mn Argus has almost doubled its revenue in the last five years.
Some have suggested that the two companies are a cosy duopoly in a world where oil and gas are far from the only industries in which PRAs wield such influence. They are operating across most of the global markets where pricing is opaque, and buyers and sellers need dependable reference data to help decide fair values for dealmaking. PRAs cover many of the most-traded mined and farmed commodities and also include, for example, the burgeoning new markets for electric vehicle battery components.
Our list (below) of the eight leading PRAs tells the story of a booming information market where – for the first time – the revenue of Platts, the long-running market leader, is being matched by the aggregate of the other seven US-UK companies, four of which are wholly or partly owned by private equity.
The picture is burnished by the emergence of the 10-year-old, UK-based Benchmark Mineral Intelligence (currently the smallest of our PRA league table) which specialises in price data on battery components including lithium, nickel and cobalt. A 2023 sale of 20% to Spectrum Equity valued the company at $500mn – at least 10x revenue. We might, therefore, expect it to achieve some very rapid growth. But, then, most PRAs are managing that and Platts still has an estimated 40-50% share of PRA activity. That share is, of course, well down on its onetime monopoly of what is now a $3bn-revenue market, with average EBITA margins estimated at 40%:
| PRAs SnapShot | Key sectors | Revenue* | Owner |
| Platts | Energy | $1.3bn | S&P Global, US |
| Argus Media | Energy | $450mn | Private equity, UK |
| ICIS | Chemicals | $260mn | RELX, UK |
| Fastmarkets | Metals/ mining | $170mn | Private equity, UK |
| OPIS | Energy | $150mn | News Corp, US |
| Expana (Mintec) | Food/ farming | $110mn | Private equity, US |
| CRU | Metals/ fertiliser | $ 90mn | Robert Perlman, UK |
| Benchmark Mineral Intelligence | Lithium, cobalt, nickel | $ 60mn | Simon Moores, UK/ private equity |
The ownership of these leading PRAs – three of which have changed hands in the last three years – inevitably give the clues to future M&A.
The ownership of the three leaders seem unlikely to change in the near future. Platts’ owner S&P acquired IHSMarkit in 2021. For Argus, some reduction in private equity stakes may have resulted in the family of chair Adrian Binks holding a 60% stake.
The no.3 player, the chemicals specialist ICIS (acquired by RELX 30 years ago) also seems unlikely to be divested, even though it is an almost invisible part of the media-tech company’s scientific, legal and business portfolio. But, with a share price that has gained 44% in the past year and now gives RELX an enterprise value of £73bn (8x revenue), there will be no pressure to relinquish such a high-performing business, however non-core it seems. The only question may be whether the powering RELX might one day choose to target PRAs as a growth sector – and make a sizeable acquisition to diversify beyond its chemicals powerhouse.
But, for now, it seems safe to assume that the big three PRAs are unlikely to be buying or selling anything significant – and any potential deals might face opposition from competition regulators in Europe and the US.
It’s so different for the five chasers.
With total revenue of some $600mn – maybe also doubled in the last five years – we might expect substantial consolidation.
News Corp acquired OPIS in 2021 for $1.2bn (9x revenue) and followed up with the $295mn Base Chemicals, both divested as a result of the S&P-IHS Markit combination. The Murdoch-controlled US-UK-Australia group hailed OPIS as “a cornerstone for a rising commodities, energy and renewables digital business”, projecting 10% annual revenue growth and 50% EBITDA margins. It has helped to make the Dow Jones business and financial portfolio (including the Wall Street Journal) the fastest growing division of News Corp, accounting for some 30% of profit. Amid prospects of a bonanza News Corp breakup (sometime, surely), a de-merged Dow Jones might seek to become a yet more significant PRA with further acquisitions. Or not.
What seems more likely, though, is that the private equity-owned Fastmarkets and food and farming specialist Expana (ex Mintec, which acquired AgriBriefing in 2023) will be chasing deals that will burnish their expected sell-offs in the next few years.
Fastmarkets is the one to watch.
It’s the $170mn-revenue division of the formerly listed Euromoney, a strategic highlight of the legendary B2B company which had been laid low by the pandemic paralysis of events and the tortured failure to sell its asset management division. As a result, Euromoney was acquired for £1.6bn by two pe companies: Astorg paid £735mn for Fastmarkets (24x 2022 profit) and Epiris paid £865mn (13x profit) for ‘the rest of Euromoney’ (now named Delinian).
Fastmarkets had begun with the £200mn acquisition some 18 years ago of Metal Bulletin, the pioneering PRA which had begun life in 1913 as a spin-off from The Ironmonger magazine, servicing the global markets using the London Metal Exchange (LME) for price discovery. In recent years, it came to account for some 40% of Euromoney profit and much of the growth, helped by bolt-on deals covering metals, mining, agriculture and forest products. The scope for further rapid growth for PRAs – despite the gradual move away from hydrocarbons – is underlined by Fastmarkets becoming a leader in the provision of indices for lithium, cobalt and nickel – key ingredients of the booming battery market.
In 2022, Fastmarkets had accounted for 25% of the former Euromoney revenue and increased by 19%, primarily through the growth of subscriptions (88% of revenue). Events were 9%.
| Fastmarkets £mn SnapShot | 2023* | 2022 | 2021 | 2020 |
| Revenue | 112 | 106.8 | 85.5 | 83.7 |
| Op profit | 42 | 39.2 | 30.4 | 31.7 |
| Margin | 38% | 37% | 36% | 38% |
It is believed that the company will now seek to acquire one of the best PRA independents, the privately-owned CRU Group (formerly Commodities Research Unit). CRU last year grew revenue by 18% to £66.1mn, with EBITDA of £14.6mn. The London-based company has PRAs across mining, metals and fertilisers.
The 55-year-old company is privately-owned by Robert Perlman, a former Economist journalist who chairs the Institute of Archaeo-Metallurgical Studies at University College London which focuses on “the role of metals in the development of civilisation”. His company, founded in 1969, generates some 30% of its business from steel and the raw materials that make it (coal and iron ore). It has teams in key locations, including in hard-to-reach markets such as China and 11 other countries. It has regularly acquired £2-3mn bolt-on businesses including solar energy specialist Exawatt in 2023.
In the last four years, the debt-free, cash-generative CRU has increased revenue by 63% and has almost trebled profit:
| CRU Group £mn SnapShot | 2023 | 2022 | 2021 | 2020 | 2019 |
| Revenue | 66.1 | 55.8 | 46.5 | 41.2 | 40.5 |
| EBITDA | 14.6 | 13.4 | 11.6 | 7.6 | 5.7 |
| Margin | 22% | 24% | 25% | 18% | 14% |
| Net cash | 54.0 | 50.2 | 37.8 | 29.3 | 28.3 |
| Headcount | 361 | 295 | 279 | 293 | 269 |
CRU is a highly-rated specialist but was not always as impressive. In the 1980s, it seemed to lose much of its expertise (and some key staffers) on the copper market in which it had long specialised. It was also, ironically, once relatively slow to develop PRAs, as opposed to research and consulting. But it’s now growing rapidly.
Euromoney was believed to have been involved previously in abortive negotiations to acquire CRU, but the prize now would be the formation of what would be the world’s fourth largest PRA. A combination of Fastmarkets, CRU and food-farming specialist Mintec would create a $400mn+ challenger for Argus Media – and a great platform for IPO.
But, first, Fastmarkets must persuade the CRU owner either to sell or merge. Maybe News Corp / Dow Jones would get involved? Fastmarkets and CRU might have a combined revenue of £300mn+ ($390mn) in 2024 which would make it the world’s third largest PRA – even before any other M&A.
A tempting prospect for Fastmarkets and, perhaps, also for CRU…
The soaring value of PRAs and subscription data businesses imply that CRU – which may achieve £70mn revenue and £18mn EBITDA in 2024 – might attract a price of more than £400mn ($520mn). Will CRU owner Perlman be tempted to choose 2024-5 as the time to sell, after a quietly glorious 55 years?
It’s what the private equity owner of Fastmarkets is dreaming about right now.
