Investment research company Morningstar Inc. is acquiring all of Sustainalytics BV, an environmental, social and governance, or ESG, ratings and research firm.

Morningstar already owns about 40% of Sustainalytics, which it acquired in 2017, and is now buying the remaining 60% of the firm's stock.

Morningstar will make a cash payment of about €55 million at closing and additional cash payments in 2021 and 2022 based on a multiple of Sustainalytics revenue for those fiscal years. Morningstar estimates the enterprise value of Sustainalytics at €170 million.

The deal is expected to close early in the third quarter.

As investors move more of their money into ESG strategies, the race to provide relevant data has become increasingly heated. Legacy benchmark stewards including MSCI Inc., S&P Global Inc. and London Stock Exchange Group PLC-owned FTSE Russell have been working to build out their sustainability data businesses as investors seek consistent data on the way companies are approaching everything from climate change to gender pay disparities.

The ESG data space has also seen consolidation in recent years. In January, S&P Global closed its acquisition of RobecoSAM AG's ESG ratings and Corporate Sustainability Assessment business. In 2016, the company acquired environmental data and risk analysis provider Trucost. In October 2019, Moody's Corp. announced it was acquiring a minority stake in SynTao Green Finance, a Chinese company focused on ESG data and analytics. Earlier in 2019, Moody's purchased majority stakes in French ESG data company Vigeo Eiris and physical climate risk data provider Four Twenty Seven Inc.