London-based pricing and valuation group Markit has acquired Communicator Inc, a technology company that provides applications to automate the processing of OTC derivatives, secure real-time communications, and compliance and counterparty management services.
The transaction will pMarkit says the acquisition will provide clients with enhanced trading and risk management capabilities across all products and asset classes. We are bringing together complementary services which reduce risk and improve efficiency, explains Lance Uggla, CEO of Markit. By joining forces with Communicator, we can provide our clients more effectively with a wealth of aggregated information and pricing. The companies combined services will allow us to offer clients the highest quality data coupled with leading technology, all on a single platform.
Markit is the pre-eminent source of data and valuations in the credit, equity, OTC derivative and structured finance markets. Markit owns the benchmark Reference Entity Database (RED) which is used in the credit derivatives market. The company also offers a bespoke Portfolio Valuations service, spanning all OTC derivatives products, that aims to provide investors with independent valuations.
In addition to OTC derivatives trade processing, compliance and counterparty management, Communicator also provides the identity management and technology which supports Bond.Hub, a bond research platform. The company, which was founded in 1999, is based in White Plains, New York.
The challenges that lie ahead in the shape of rising transaction volumes in the OTC derivatives markets will continue to test the industrys operational processes, and attract regulatory concern, says Leo Schlinkert, President and CEO of Communicator, who will join the Markit board. The combination of Markits pricing and valuation services with Communicators OTC derivatives post-trade platform meets these challenges by offering an end-to-end service including trade confirmation, pricing, valuation and trade lifecycle events which will provide a significant benefit to the marketplace.
Bradford S. Levy, Managing Director, Firmwide eBusiness Group at Goldman Sachs and a major user of both Markit’s and Communicator’s services, says he is excited by the deal. Markit’s performance has been very impressive, and both companies products are well entrenched with the sell-side and buy-side communities, he says. This transaction will further fuel the company’s growth, and will allow Markit to expand its product set rapidly.”
Jon Anderson, Head of Operations at BlueMountain Capital, a hedge fund client of both firms, concurs. “We view this as a combination of excellence with excellence which will advance the financial markets through automation, data and transparency, he says. We look forward to working with the combined team who will undoubtedly ensure the company continues to be a global force in the industry.