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S&P Global (SPGI) to Sell LCD Business to Morningstar for $650M

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S&P Global Inc. (SPGI - Free Report) yesterday announced that it will sell its Leveraged Commentary and Data (“LCD”) business and its related family of leveraged loan indices to Morningstar Inc.

The divestment was a condition for receiving regulatory approval from the European Commission for S&P Global’s merger with IHS Markit, completed on Feb 28, 2022.

The $650-million deal, subject to customary closing conditions, will involve a combination of payments through cash on hand and a new credit facility, and is expected to be completed in the third quarter.

S&P Global will receive $600 million at closing and a contingent payment of up to $50 million six months later after the fulfillment of certain conditions associated with the transition of LCD customer relationships.

LCD is a provider of proprietary research on the U.S. and European leveraged loan, collateralized loan obligation, high-yield bond, and mid-market/direct-lending markets, and has more than 60 employees. It will be merged with Morningstar’s PitchBook platform.

SPGI has had a decent run on the bourses over the past year. The stock has gained 13.3% compared with 6% decline of the industry it belongs to and 13% rise of the Zacks S&P 500 composite.

Zacks Rank and Stocks to Consider

S&P Global currently carries a Zacks Rank #3 (Hold).

Some top-ranked stocks in the broader Business Services sector that investors may consider are Cross Country Healthcare (CCRN - Free Report) , NV5 Global (NVEE - Free Report) and Clean Harbors (CLH - Free Report) .

Cross Country Healthcare sports a Zacks Rank #1 (Strong Buy). The company has a long-term earnings growth of 6.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cross Country Healthcare has delivered a trailing four-quarter earnings surprise of 41.5%, on average. CCRN’s shares have surged 71.9% in the past year.

NV5 Global also carries a Zacks Rank #1. The company has an expected earnings growth rate of 6.1% for the current year. It has delivered a trailing four-quarter earnings surprise of 22.2%, on average.

NV5 Global’s shares have surged 41.4% in the past year. The company has a long-term earnings growth of 14.2%.

Clean Harbors carries a Zacks Rank #1 as well. The company has an expected earnings growth rate of 17% for the current year.

Clean Harbors pulled off a trailing four-quarter earnings surprise of 43.2%, on average. CLH’s shares have jumped 26.4% in the past year.

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