RiskMetrics Attracts a Buyer

Bank Technology News | March, 2010

Following months of buzz about an acquisition, RiskMetrics has found a buyer—a $1.55 billion sale to MSCI that will combine that firm’s investment analysis and index technology with RiskMetrics’ risk analysis, financial research and corporate governance services for investors.

The merged RiskMetrics/MSCI combo would be a firm of about $750 million in yearly revenues with 2,000 staffers in almost two dozen countries.

MSCI provides tools to analyze holdings in stocks, bonds and funds. Its products include the BarraOne stress test, which take equity market prices, interest rates, credit spreads, currencies and commodities into consideration as part of stress testing. RiskMetrics sells the Value at Risk tool, which provides information for risk managers hoping to measure the value of portfolio losses.

MSCI had previously been mentioned in the financial press as a buyer of RiskMetrics, along with other firms such as Bloomberg, McGraw Hill and Thomson Reuters. The transaction is about $21.75 per share— RickMetrics’ Feb 26 closing price was $29.98 per share. MSCI will pay for the deal with existing cash and proceeds of debt, and has received a commitment letter from Morgan Stanley Senior Funding for senior secured credit facilities, which would be used to fund the cash part of the deal.

The New York-based MSCI hopes the acquistion will close in the third quarter. It’s still subject to antitrust clearance, MSCI’s receipt of proceeds for the deal’s debt financing and RiskMetrics’ shareholder approval.