News Corp. eyes $500M of 10-year bonds supporting acquisitions

News Corp. has announced plans for a $500 million, 10-year (non-call five-year) unsecured bond offering to fund the acquisition of Base Chemicals and Oil Price Information Services, or OPIS, businesses, as well as general corporate purposes. An investor call was slated for Feb. 8 at 10 a.m. ET via left lead Citi, with pricing expected later Feb. 8.

The transaction comes on the back of News Corp.'s acquisition of the OPIS and Base Chemicals businesses from S&P Global and IHS Markit, which was agreed to in 2021 for cash considerations of about $1.15 billion and $295 million, respectively. Both acquisitions are expected to close in the second half of 2022, News Corp. said, with the acquisitions set to align with its Dow Jones business.

Both OPIS and Base Chemicals segments were divested as part of the merger of S&P Global and IHS Markit, and News Corp. said the businesses offer recurring revenues with high EBITDA margins but modest capital expenditure requirements.

News Corp. generated revenue and EBITDA of about $10 billion and $1.5 billion for the 12 months period ending December 2021. The offering is expected to translate into gross and total leverage of 1.8x and 0.1x, respectively, according to an investor presentation accompanying the offering.

The company was last in the bond market in April 2021, raising $1 billion of 3.875% unsecured notes due 2029. The bonds were placed at par and closed Feb. 7 at 95.951 for a 4.534% yield to worst, according to S&P Global Market Intelligence data.

The bonds come with an investment-grade style covenant package and will feature up at a 40% equity claw at par plus coupon for the first three years.

BofA Securities, JP Morgan, Goldman Sachs, Morgan Stanley, HSBC and Deutsche Bank are joint bookrunners on the deal.