BUSINESS | JANUARY 23, 2010
RiskMetrics Puts Itself
Up for Sale
RiskMetrics Group Inc. has put itself on the auction block, according to
people familiar with the matter.
A number of media companies and
private-equity firms have been contacted about a potential acquisition of
the New York provider of risk analysis, financial research and
corporate-governance services for investors such as pensions and hedge
The company could fetch a premium of about
30% to its current value, said one person involved in a potential
transaction. That would value the company, which has about 1,100 employees,
all in New York, at around $1.3 billion, based on where its shares traded
Friday. Still, a completed deal is far from certain, and like any auction,
bidders may not offer enough to persuade it to sell.
Among those considering a bid is
MSCI Inc., a former Morgan Stanley unit that specializes in building
market indexes, these people said. Other interested parties include media
companies such as Bloomberg, McGraw-Hill Cos. and
A spokeswoman for RiskMetrics didn't respond
to requests for comment. Spokesmen for MSCI, McGraw-Hill and Thomson Reuters
declined to comment. A Bloomberg spokeswoman didn't provide comment.
Evercore Partners is handling the sale, said the people familiar with
Many of the firms looking at RiskMetrics may
also be weighing bids for
Interactive Data Corp., a financial-market-data analysis firm partially
Pearson PLC, owner of the Financial Times.
IDC, with an stock-market valuation of $2.8
billion, would be a larger deal. The company announced this past week that
its board is undertaking a preliminary review of strategic alternatives for
With their relatively stable
subscription-based businesses, these companies also appeal to private-equity
firms, which could be bidders for either. Potential bidders include Kohlberg
Kravis Roberts & Co. and Carlyle Group. Roughly 92% of RiskMetrics revenue,
estimated at $300 million in 2009, are recurring.
RiskMetrics already has private-equity
involvement. Three firms—General Atlantic, Spectrum Equity and Technology
Crossover Ventures—together control about 46% of the company, having
invested $122 million in the business in 2004.
The company was founded in 1994 as a
portfolio-risk analysis unit inside J.P. Morgan Chase & Co. and was split
off in 1998. The company has grown via acquisition, most notably with the
acquisition of corporate-governance firm Institutional Shareholders Services
in January 2007 for about $550 million.
That unit often weighs in on proxy battles
and can tip the balance in close elections or hostile takeovers where a
target is battling outside shareholders or an unfriendly acquirer.
RiskMetrics went public in early 2008. In New
York Stock Exchange trading Friday, RiskMetrics rose $1.55, or 10%, to
$17.07, putting its market value above $1 billion. RiskMetrics' shares
peaked at $25.50 in 2008.
Jeffrey McCracken at
firstname.lastname@example.org and Peter Lattman at
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