Information services company Markit has acquired Data Explorers from mid-market private equity firm Bowmark Capital. The terms of the transaction, including the amount, were not disclosed. The acquisition expands Markits footprint in the equity and fixed income markets.
The transaction follows a competitive tendering process run by the Bowmark management team. The firm paid 60 million for a 51% stake in the data company in 2007.
Data Explorers data set, which covers $12 trillion of securities in the lending programes of over 20,000 institutional funds, provides a comprehensive view of short interest data and institutional fund activity across all market sectors.
This acquisition comes as the new regulatory environment is changing the dynamics of the securities financing markets, said Markit. By combining Data Explorers data set with its own products and services, Markit will be able to develop new offerings allowing clients to optimize their use of collateral. Markit, which provides CDS pricing and data for loans, fixed income and equity, will also develop products for equity market participants in the ETF, dividend forecasting and quantitative research areas to complement its existing services.
Lance Uggla, CEO of Markit, said in a press release on the acquisition: Markits acquisition of Data Explorers represents a logical extension to our existing data, research and analytics for the equity markets and complements our extensive fixed income offering. Our global distribution capabilities and robust technology infrastructure put us in a strong position to develop a compelling offering for our combined customer base globally.
In an interview with Global Custodian, Armins Rusis, managing director and global head of data, indices and research at Markit further explained the rationale behind the acquisition: Markit focuses on organic growth but is always on the look out for new companies that provide an introduction into new sectors. From time to time we look at leaders in their field in terms of products we can leverage on while using our skills towards growing the business.
“Our businesses are cross asset classes they [Data Explorers] bring expertise not only in equities, but also in the fixed income product space. Specifically, we see opportunities to bring their expertise into our global indices business and our work in quantitative factor analysis. More broadly, this acquisition fits in with our other equities-related businesses including transaction cost analysis and Markit Research Manager and Markit Vote which are services that help asset managers manage and evaluate the services which they receive from the sell-side.
Donal Smith, CEO of Data Explorers, said in the press release: “With support from Bowmark Capital, Data Explorers has achieved fantastic growth over the last four years. We have more than doubled revenues and tripled profitability with new product innovation and expansion into Europe, North America and Asia. Data Explorers is now the leading provider of data and analytics to the entire securities finance market from agent lenders through to hedge funds and our services are a great fit with those offered by Markit.”
The integration of Data Explorers, including the company’s 100 employees, within Markit is underway. Data Explorers was established in 2002 and has offices in New York, London, Edinburgh and Hong Kong.
Deutsche Bank advised Data Explorers on the transaction.
(JDC)