Moody's to Buy Amsterdam based publisher Bureau Van Dijk (BVD) for $3.3Billion

From Reuters:

Credit ratings agency Moody's Corp (MCO.N) said on Monday it would buy Dutch financial information provider Bureau van Dijk for about $3.3 billion, to extend its risk data and analytical businesses. 

Moody's will fund the deal through a combination of offshore cash and new debt financing.

Amsterdam-based Bureau van Dijk, owned by the fund EQT VI, distributes financial information and private company datasets of 220 million companies.

The deal is expected to benefit Moody's revenue and earnings in 2019, while adjusted earnings in 2018 is expected to see an uptick.

From the press release:

Moody’s Corporation (NYSE:MCO) announced today that it has entered into a definitive agreement to acquire Bureau van Dijk, a global provider of business intelligence and company information, for €3.0 billion (approximately $3.27 billion). The acquisition extends Moody’s position as a leader in risk data and analytical insight.

“Bureau van Dijk is a high growth information aggregator and distributor that positions Moody’s at the center of a unique network of global risk data,” said Raymond McDaniel, President and Chief Executive Officer of Moody’s. “This acquisition provides significant opportunities for Moody’s Analytics to offer complementary products, create new risk solutions and extend its reach to new and evolving market segments.”

“Moody’s is a highly regarded, authoritative source of credit ratings and analytical tools, with a strong brand and global reach,” said Mark Schwerzel, Deputy CEO of Bureau van Dijk. “The addition of Bureau van Dijk’s powerful information platform to Moody’s Analytics’ suite of risk management solutions presents a wide range of opportunities for us to better serve our combined customer base.”

Bureau van Dijk, operating from its Amsterdam headquarters, aggregates, standardizes and distributes one of the world’s most extensive private company datasets, with coverage exceeding 220 million companies. Over 30 years, the company has built partnerships with more than 160 independent information providers, creating a platform that connects customers with data that addresses a wide range of business challenges.

Bureau van Dijk’s solutions support the credit analysis, investment research, tax risk, transfer pricing, compliance and third-party due diligence needs of financial institutions, corporations, professional services firms and governmental authorities worldwide.

In 2016, Bureau van Dijk generated revenue of $281 million and EBITDA of $144 million. Bureau van Dijk will be reported as part of Moody’s Analytics’ Research, Data & Analytics (RD&A) unit. Moody’s expects approximately $45 million of annual revenue and expense synergies by 2019, and $80 million by 2021. On a GAAP basis, the acquisition is expected to be accretive to Moody’s EPS in 2019. Excluding purchase price amortization and one-time integration costs, it is expected to be accretive to EPS in 2018.

Moody’s will fund the transaction through a combination of offshore cash and new debt financing. The acquisition is subject to regulatory approval in the European Union and is expected to close late in the third quarter of 2017.

Bureau van Dijk is owned by the fund EQT VI, part of EQT, a leading alternative investment firm with approximately €35 billion in raised capital across 22 funds. EQT funds have portfolio companies in Europe, Asia and the U.S. EQT works with portfolio companies to achieve sustainable growth, operational excellence and market leadership.

"We are very pleased with Bureau van Dijk's development under EQT ownership and want to thank management and employees for their hard work and dedication. We see an excellent fit between Bureau van Dijk and Moody’s Analytics, and congratulate Moody’s on acquiring this uniquely positioned company," said Kristiaan Nieuwenburg, Partner at EQT.

 
Some older stories on BVD from the blog:

Private Equity owners but the company up for sale in 2007 and had trouble selling at the time.  Reports suggested it sold for about $1.0B so quite an impressive return over 10 years for some group of owners.

Bezos' Principles for Success

Recently, Jeff Bezos released his annual letter to shareholders and it it he defined why it will always be "day 1" at Amazon.  In order to ensure that determination, he also outlined a few management principles which he believes are critical for the continued success of the company. 

These are:

• Operate a high-velocity decision making environment
• Recognize it is preferable to decide when only partial (70%) truth is known
• Appreciate that a boss or team member can disagree but must commit when decisions are taken 
• Recognize true misalignment issues early and escalate them immediately

Read the whole letter here.

Berlin Publishers' Forum Session on EdTech Trends

Next week is the Klopotek sponsored Publishers' Forum in Berlin.  I am participating in a panel discussion on what is happening in EdTech.  Here are my summary slides.

Publishers' Forum Berlin 2017: Edtech Market Overview from Michael Cairns

Two million miles flown.

I think I got 90% of them counted. Beginning in 1968 - through last week.

And which airports have I visited the most:

EWR				712
LHR				390
BOS				79
SFO				78
DCA				76
JFK				70
LAX				59
HNL				52
OGG				41
FRA				37
ORD				37
CVG				34
SYD				32
CMH				27
ATL				26
HKG				21
BKK				19
DFW				16
GVA				16
IAD				15
MEL				15
PDX				14
DET				13
SEA				12
CDG				11
LGA				11
TXL				11
DUB				10
YYZ				10
AKL				8
LAS				8
LIR				8
LNY				8
ZCH				8
OLY				7
IAH				6
LIN				6
MCO				6
MIA				6
MSY				6
THR				6
PBI				6
DEN				4
HAM				4
ROM				4
SING				4
TPA				4
BUD				3
AMS				3
ARL				2
Beirut				2
Birm				2
BNA				2
BNA				2
BOM				2
BRU				2
CBR				2
CNS				2
DAYTON				2
DEL				2
EDI				2
GLA				2
ICH				2
KBL				2
KHI				2
LHE				2
MAD				2
MSP				2
MXP				2
NRT				2
ORK				2
PEK				2
PEW				2
PPT				2
PRG				2
RSW				2
SAN				2
YUL				2
YVR				2
YVR				2
MAN				1
SLE				1
VIE				1

Pearson Annual Results

Pearson released their annual results back in February.  Here are the highlights and also their annual report which includes details about their future business strategy.  Since the release, share prices have remained flat and at long-time lows.

From their press release:

Pearson, the world’s learning company, is announcing its preliminary full year results for 2016, following its 18 January trading statement. Key headlines include:

• 2016 operating profit and eps slightly better than January 2017 guidance. Strong 2016 cash conversion
  • Sales of £4,552m declined 8% in underlying terms. Good growth in Pearson VUE, US Virtual Schools Online Program Management and Wall Street English in China was more than offset by expected declines in US and UK student assessment and US school courseware, and a much worse than expected decline in North American higher education courseware, as detailed in our 18 January trading statement.
    
  • Deferred revenue was broadly level in underlying terms and is now 18% of our revenues (2015: 16.5%).
    
  • Adjusted operating profit of £635m was down 21% in underlying terms due to weaker revenues, the partial reinstatement of incentives and other operational factors, partially offset by cost savings from the restructuring plan announced in January 2016, a larger contribution from Penguin Random House, helped in part by modest one-off benefits from the integration programme, and a return to profit in our Growth segment.
    
  • Adjusted earnings per share fell 16% to 58.8p reflecting weaker operating results, higher interest and a higher tax rate of 16.5%, offset by the strength of the US Dollar and other currencies against Sterling.
    
  • Operating cash flow increased 52% benefitting from tight working capital control, lower cash incentive payments and the weakness of Sterling. Our cash conversion increased to 104% (2015: 60%).
    
  • Net debt increased to £1,092m (2015: £654m) reflecting the strengthening of the US Dollar relative to Sterling and restructuring costs.
    
  • Digital & services revenues now make up 68% of our total revenues (2015: 65%). We have made good progress in simplifying our technology platforms and seen strong growth in key digital products Revel, iLit, Q-Interactive, Connections Education and global wins in Online Program Management.
  •  
• 2016 statutory results and goodwill impairment: Statutory loss for the year of £2,335m included an impairment of goodwill of £2,548m. This impairment charge is consistent with the challenging market conditions which we disclosed in January, and which resulted in an outlook for profit which is approximately £180m lower than previously anticipated.
  
• 2016 restructuring program: Our 2016 restructuring program was delivered in full, reducing our cost base exiting 2016 by £425m at a cost of £338m. Adjusting for the impact of currency our plan delivered slightly higher benefits at a slightly lower cost than planned.
  
• 2017 guidance, strategic actions to accelerate digital, simplify the portfolio and preserve financial flexibility
  • 2017 outlook in line with 18 January trading statement: Our guidance range is for operating profit in 2017 of £570m to £630m, adjusted earnings per share of 48.5p to 55.5p and cash conversion in excess of 90%. This is based on our existing portfolio, a 2017 net interest charge of £74m, a tax rate of approximately 20%, and exchange rates on 31 December 2016.
  • Trading in early 2017: Our early trading is in line with expectations. The phasing in our North American higher education courseware business in 2017 will show a benefit from returns normalising in the first half, whilst the underlying market pressures we have described will impact gross sales primarily in the second half.
  • Higher education courseware strategic actions: On 18 January we announced a series of actions, accelerating our work to simplify our product technology platform and enhancing our courseware service capabilities with £50m of additional investment, reducing eBook rental prices and launching our own print rental program piloting with an initial group of 50 titles made available through Pearson’s approved rental partners. We have reduced prices for eBook rental across 2,000 titles, have made good progress on our print rental program and are today announcing details of the first wave of new digital products with greater personalisation, enhanced engagement and cognitive tutoring.
  • Simplifying Pearson
    • Penguin Random House: With the integration of Penguin Random House complete, and with greater industry-wide stability on digital terms, we have issued an exit notice regarding our 47% stake in Penguin Random House to our JV partner Bertelsmann, in the contractual window, with a view to selling our stake or recapitalising the business and extracting a dividend. We will use proceeds from this action to maintain a strong balance sheet; invest in our business; and return excess capital to shareholders whilst retaining a solid investment grade credit rating. Our guidance assumes ownership of our stake in PRH for all of 2017.
    • Direct Delivery: We will continue to reduce our exposure to large scale direct delivery services and focus on more scalable online, virtual, and blended services, across our portfolio. We are today announcing that Pearson has initiated processes to explore a potential partnership for our English language learning business Wall Street English (WSE) and the possible sale of our English test preparation business Global Education (GEDU). These processes are at an early stage and there is no certainty that they will lead to transactions. In 2016, these businesses contributed £253m of revenues and £3m of adjusted operating income. Our guidance assumes ownership of both for all of 2017.
    • Efficiency: We continue to manage our costs tightly. We will take further actions to improve the overall efficiency of the company and continue to realign our cost base to reflect the changing needs of our markets. We will update on our plans through the year.
  • Preserving financial flexibility
    • Debt repayment: To ensure efficient use of the cash balances we held at 31 December 2016, we are today announcing that we will trigger the early repayment option on our $550m 6.25% Global Dollar bonds 2018.
    • Rebasing the dividend: As already communicated in January, we intend to recommend a final dividend of 34p for an overall 2016 dividend of 52p in line with our guidance, but as a result of the factors above we intend to rebase our dividend from 2017 onwards.

Initiative for Open Citation Data

A new group backed by PLOS, Wikimedia Foundation, eLife and others has come together to establish a framework for sharing article & journal citation data in an open manner.   In a short period of time this initiative appears to have gained significant support from publishers such as American Geophysical Union, Association for Computing Machinery, BMJ, Cambridge University Press, Cold Spring Harbor Laboratory Press, EMBO Press, Royal Society of Chemistry, SAGE Publishing, Springer Nature, Taylor & Francis, and Wiley.  Each of these publishers have agreed to supply citation metadata publically and this support will also significantly increase the amount of citation reference data available in Crossref.

The organization establishing this effort is named I4OC and they list (on their site) what key benefits should result for release of the citation databases: 

• The establishment of a global public web of linked scholarly citation data to enhance the discoverability of published content, both subscription access and open access. This will particularly benefit individuals who are not members of academic institutions with subscriptions to commercial citation databases.
• The ability to build new services over the open citation data, for the benefit of publishers, researchers, funding agencies, academic institutions and the general public, as well as enhancing existing services.
• The creation of a public citation graph to explore connections between knowledge fields, and to follow the evolution of ideas and scholarly disciplines.

Press release here

Library of Congress Copyright Office wasted $11MM on new Technology

Techdirt received documents detailing gross negligence and incompetence at the office of copyright which resulted in the abandonment of a system to improve copyright recording and reporting at the library of congress.  

Techdirt does a great job of summarizing the findings but the bigger story is the White House's determination to remove the copyright office from the Library of Congress and make the head of the office a political appointment.

Here is some of the write-up from Tech Dirt:

Basically, the ship was almost entirely rudderless when Pallante was in charge. Ask for $1.9 million, spend $11.6 million -- without getting a working system -- and no one seemed to check on any of it.
According to the report, the most basic project management concepts were completely lacking at the Copyright Office. Pages 26 through 28 of the document embedded below should elicit gasps from anyone who's done any kind of project management. I won't detail all of it, but here are just a few highlights:

• No monitoring of the project schedule
• No project budget approval process at all
• No periodic reviews to see if things were on schedule and within budget
• No project management framework at all
• No comprehensive project management plan for the executiion and monitoring of the project.
• No official tracking of scope and schedule changes
• No documentation of departures from planned schedule
• No plan for what staffing was needed for the project
• No analysis of alternatives
• No system requirements baseline
• No system development plan
• No requirements for best practices, customer oversight or acceptance of the vendor
• No technical requirements to ensure user functionality given to the vendor
• No details on deliverables given to the vendor (seriously -- no requirements to hand over the code or any documentation)
• No review criteria
• No defined technical framework
• No security testing

Annual Horizon Higher Educational Trends Report

Just released from the executive summary:

What is on the five-year horizon for higher education institutions? Which trends and technology developments will drive educational change? What are the critical challenges and how can we strategize solutions? These questions regarding technology adoption and educational change steered the discussions of 78 experts to produce the NMC Horizon Report: 2017 Higher Education Edition, in partnership with the EDUCAUSE Learning Initiative (ELI). This NMC Horizon Report series charts the five-year impact of innovative practices and technologies for higher education across the globe. With more than 15 years of research and publications, the NMC Horizon Project can be regarded as education’s longest-running exploration of emerging technology trends and uptake. Six key trends, six significant challenges, and six developments in educational technology profiled in this report are poised to impact teaching, learning, and creative inquiry in higher education. The three sections of this report constitute a reference and technology planning guide for educators, higher education leaders, administrators, policymakers, and technologists.

Full Report: http://cdn.nmc.org/media/2017-nmc-horizon-report-he-EN.pdf

Past reports 

An iPad in every classroom and for every student

At Maryville College in Missouri, campus President Mark Lombari speaks to CHE about their recent initiative providing iPads to all students:

Well, we about outfitted our entire student body with iPads, 2,800 deployed thus far to our traditional and certain selected graduate programs, loaded with free apps, about 80 learning apps of all different types, around different disciplines.

And then we've provided training for our faculty. We actually added two weeks to every faculty-member contract so that one week in May and August would be faculty training in the use of all this technology. And thus far 90 percent of our faculty have gone through the training and then are applying it in the classroom.

So what happens in that classroom is we've got our students and our faculty engaged in this vibrant learning process, where the students own it. They're involved, they're engaged, they actually are a part of creating that content.

So an example of that would be in a science class, for example, we would be going through a smart textbook. And the students and the faculty would be downloading and bringing video and other materials and loading that in so everyone can benefit from what the students and the faculty are bringing in and learning.

And the other part of this that's crucial is it's based on learning theory and learning diagnostics. So we have a learning diagnostics profile of every student, and we also provide that and implant that into the class for the faculty member. So the instruction on a one to one can be very personalized.

So if you're an auditory learner, you might be listening to the faculty member talk about this while I may be sitting next to you watching a video on the same topic and learning. So it really gets at the multiplicity of learning styles that exist, that we know exist, in every student and in every classroom.

 Link: http://www.chronicle.com/article/One-Campus-s-iPad-Revolution/238942

The Netherlands welcomes Trump in his own words

And if that's not funny enough here's link to all of them (so far).

http://www.everysecondcounts.eu

Eugene Schwartz - A Life.

My friend Gene Schwartz passed away this week aged 90.  Several years ago he returned to Del Mar, California where he had spent many years earlier in life and, as always with Gene, he seemed to be cheerfully loving the lifestyle.   Recently, he was using his new 'start-up' Worthly Shorts to document the tales and stories about the Del Mar community he seems to have cared a lot about.

I can't say I knew him very well since I only met him for the first time less than 10 years ago but he was a good friend and always had a positive view on life (including mine).  He was always supportive of PND and frequently had something to say about my photos.  I tried to encourage him to scan and catalog his own collection but he never got to it, but Gene always seemed to have a lot going on - especially for someone in his twilight years.  Back in 2009, Gene wrote a post for PND which happily got me a lot of traffic.

About a month ago, I asked him for some advice about reaching out to military communities to promote a new website I've been working on (TheGlassFiles) and his advice was perfect.  Gene was one of the 'great generation' who served in world war 2 which is why I wanted his advice.   We also occasionally spoke about politics and the world generally and I am happy to report that Gene's last sentences to me were of hope about our prospects under this new administration.

PS regarding the election, now that the results are in, thinking out of the box may be in order. I have great faith in the foundations of our republic that our founders left us with, and the ultimate common sense of human nature given the opportunity to exercise it. Given the poor choices we had, It may not be as bad as you fear.

 I hope he is right.

All the best Gene.

Aaron Perzanowski on The End of Ownership

From Youtube intro:

Recent shifts in technology, intellectual property and contract law, and marketplace behavior threaten to undermine the system of personal property that has structured our relationships with the objects we own for centuries. Ownership entails the rights to use, modify, lend, resell, and repair. But across a range of industries and products, manufacturers and retailers have deployed strategies that erode these basic expectations of ownership. Understanding these various tactics, how they depart from the traditional property paradigm, and why some have been embraced by consumers are all crucial in developing strategies to restore ownership in the digital economy.

Aaron Perzanowski teaches courses in intellectual property, telecommunications and innovation. Previously, he taught at Wayne State University Law School, as a lecturer at the University of California Berkeley School of Information, and as a visitor at the University of Notre Dame Law School. Prior to his teaching career, he served as the Microsoft Research Fellow at the Berkeley Center for Law & Technology and practiced law at Fenwick & West in Silicon Valley.

His research addresses topics ranging from digital copyright to deceptive advertising to creative norms within the tattoo industry. With Jason Schultz, he is the author of The End of Ownership: Personal Property in the Digital Economy (MIT Press 2016), which argues for retaining consumer property rights in a marketplace that increasingly threatens them. His book with Kate Darling, Creativity Without Law: Challenging the Assumptions of Intellectual Property (NYU Press 2017), explores the ways communities of creators operate outside of formal intellectual property law.

More info on this event here:
https://cyber.harvard.edu/events/lunc...