We’ve heard rumblings in the market about a potential sale of Avox and now, ending months of speculation, Thomson Reuters signing not only a definitive agreement to acquire DTCC’s Avox, a supplier of legal entity data, but also an agreement to acquire Clarient, the industry-backed Know Your Customer (KYC) and client reference data platform that includes DTCC as an owner and user.
DTCC is rumoured to be offloading the businesses on the basis that Avox is not a great fit in its organisational structure, and that it no longer wants to fund Clarient. For Avox and Clarient, the acquisition is expected to be a great opportunity to extend their potential, while DTCC and the banks behind Clarient are keen to find a more suitable vendor partner with presence in the KYC and client onboarding markets. To date, five banks are believed to have committed to ongoing participation in Clarient after it is acquired by Thomson Reuters.
The acquisitions will build out Thomson Reuters’ capabilities in the complex KYC and client onboarding markets, where it offers the Org ID KYC managed service, and strengthen its position in a competitive field that includes players such as Bloomberg, which introduced its Entity Exchange solution in May 2016, and smaller dedicated providers of client lifecycle management such as Fenergo and iMeta.
The company expects to close the acquisitions of Avox and Clarient by the end of Q1, subject to closing conditions, and will integrate the businesses within its portfolio of risk management, compliance and reference data offerings. Staff from both acquisitions are expected to move to Thomson Reuters, although there may be some duplication at the executive layer, so it remains to be seen how that plays out.
Steve Pulley, managing director of Risk Managed Services at Thomson Reuters, says: “We are excited to sign these acquisitions, bringing with them significant continued commitment of a wide range of customers including the founder banks of Clarient. The selection of Thomson Reuters by the founder banks and DTCC as the firm to lead the next wave of development in this exciting space reflects the progress we have made in our legal entity and KYC managed service franchise over the past three years.”
Matt Stauffer, CEO at Clarient says: “Clarient and Avox have made a significant impact addressing the industry’s client reference data and lifecycle management requirements, reducing both cost and risk for our clients. We are proud of their successes and are confident that by integrating these businesses into Thomson Reuters already strong portfolio of risk management, compliance and reference data offerings, they will form a holistic solution that supports and accelerates the industry’s desire to mutualise client data solutions.”
Colin Hall, group chief data officer at Credit Suisse, one of the industry backers of Clarient, says: “Combining the services and vision of Clarient and Thomson Reuters will provide an enhanced and more effective client experience, supporting critical processes throughout the onboarding process in times of continuous global regulatory change. We will continue to partner with Thomson Reuters to drive further efficiencies for the industry and are excited for the benefits this will provide.”
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