Deutsche Boerse AG is buying an 80% share in Institutional Shareholder Services Inc., the two firms said Tuesday.
Genstar Capital LLC, which acquired ISS in 2018, will keep a 20% stake in the deal that is expected to close in the first half of 2021, subject to closing conditions and regulatory approvals. ISS is valued at $2.3 billion, according to the joint announcement.
Genstar acquired ISS from Vestar Capital Partners for $720 million; Vestar had purchased the proxy advisory firm from MSCI for $364 million in 2014.
The current executive leadership team including ISS President and CEO Gary Retelny will co-invest in the transaction and continue to run ISS with editorial independence.
ISS is a leading corporate governance, ESG, data and analytics provider.
The partnership will allow the global market infrastructure provider "to emerge as a leading global ESG data player," Deutsche Boerse said. ISS has more than 4,000 clients including many leading institutional investors. "This transaction will bring a strengthened capital structure to ISS and the ability to further accelerate organic and inorganic growth initiatives for the benefit of ISS' clients while leveraging the infrastructure of Deutsche Boerse and, in particular, its global index franchise," the announcement said.