Data Explorers, a provider of data and analytics around short selling, has hired Deutsche Bank as adviser to undertake a strategic review of the business.
The news was initially reported in UK newspaper the Daily Telegraph. The report mentions a deal with an asking price of 300 million and cites Thomson Reuters and Bloomberg as interested buyers.
Data Explorers would not confirm or deny the report, although a spokesperson said it is business as usual for the company and the service to clients remains unaffected.
Private equity firm Bowmark paid 60 million for a 51% stake in the business in 2007.
Commenting on the potential deal, an industry source said: The original acquirers in 2007 brought in a team from Reuters. They did an excellent job at marketing their information. Theyve done as much as they can, he said, suggesting that it is perhaps a good time to sell given the three to five year cycle for private equity acquirers. He added in keeping with this cycle, market conditions would not have allowed for a good return if the business were sold in 2010. 2011 is looking better with uncertainty about how 2012 would play out for M&A, he said.
However, he added, the price tag reported by the Daily Telegraph, which implies 20 times the companys 15 million earnings in 2011, is toppish in the context of the overall industry and the fact that securities lending has had a tough year with overall revenues in decline.
(JDC)