MSCI Announces $100M ASR as Part of $300M Share Repurchase Authorization

MSCI

, a leading provider of investment decision support tools worldwide, announced today that its Board of Directors authorized the repurchase of up to $300 million of MSCI's shares of common stock. As part of this authorization, MSCI has entered into a $100 million Accelerated Share Repurchase (ASR) agreement with Morgan Stanley & Co. LLC, which will begin immediately. The $200 million balance of the authorization will be available for utilization from time to time through 2014 at the company's discretion. “MSCI's long-term growth remains supported by secular investment trends, including the globalization of investing; the growing popularity of passive investing; the need to measure, manage and report risk; and the growing focus on issues of sustainability and governance. The $300 million share repurchase authorization reflects our confidence in the long-term strength of the company and our commitment to a very disciplined capital deployment strategy,” said Henry Fernandez, Chairman and Chief Executive Officer. "Our strong cash position and robust cash flow allow us to rapidly return $100 million to shareholders in the form of an ASR. While our focus remains on funding our organic growth opportunities and pursuing attractive strategic opportunities, we are confident that our future cash generation will remain strong and will enable us to provide our shareholders an additional return of capital,” added Mr. Fernandez. Under the ASR agreement, MSCI will pay Morgan Stanley $100 million in cash and receive approximately 2.2 million shares of its common stock at the inception of the ASR and may receive from Morgan Stanley additional shares at or prior to maturity of the ASR. The total number of shares to be repurchased will be based primarily on an arithmetic average of the volume-weighted average prices of MSCI common stock on each trading day during the repurchase period. This average price will be capped such that only under limited circumstances will MSCI be required to pay cash or deliver shares to Morgan Stanley at settlement. The company anticipates that all repurchases under the ASR will be completed no later than July 2013, which is the final date of the repurchase period, although Morgan Stanley has the right to accelerate settlement of the ASR under certain circumstances. In addition to the ASR, MSCI's Board of Directors has authorized the purchase of an additional $200 million of MSCI's common stock. Share repurchases will take place in the open market or in privately negotiated transactions from time to time based on market and other conditions. The $200 million balance of the authorization may be modified, suspended, terminated, or extended by the Board of Directors at any time without prior notice. The ASR will be funded with cash on hand. During the first nine months of 2012, MSCI generated $288 million of cash flow from operations, including $57 million from the reduction of trade receivables. As of September 30, 2012, MSCI had $434 million of cash and cash equivalents and short-term investments, which includes $283 million available in the United States and $151 million held internationally. On November 30, 2012, MSCI used $125 million, mostly from its international funds, to complete the acquisition of IPD Group.