It’s all change at IHS Markit as the company pushes further into the alternatives market through an agreement to acquire Ipreo and plans to move out of OTC derivatives processing through a sale of its MarkitSERV derivatives trade processing business.
The company has agreed to acquire Ipreo, a provider of financial services technology, data and analytics, for $1.855 billion from private equity firm Blackstone – which has its hands full after agreeing to buy 55% of the Thomson Reuters financial and risk business early this year – and the Goldman Sachs Merchant Banking Division.
Since Blackstone and Goldman Sachs invested in Ipreo in 2014, the company has grown revenue by nearly 60% to $290 million, completed three acquisitions to form a private capital markets segment, extended its presence from the sell-side to include the buy-side and expanded its global footprint. It has over 3,500 customers globally and more than 2,000 employees in financial hubs around the world.
Following the acquisition announcement, Lance Uggla chairman and CEO at IHS Markit, said Ipreo would significantly increase the company’s presence in the private markets and alternatives sector, which the company has been building through organic investment. He commented: “Ipreo has a strong brand in financial markets and its services are a logical and complementary extension to our financial services business and customer base.”
On its intent to sell MarkitSERV, the company stated: “We recognise the importance of the services that MarkitSERV provides to our customers and its strategic value to the market. Right now, we believe this business might be better placed with another company that can combine it with other assets to drive greater long-term value.”
IHS Markit doesn’t have a timetable for the sale and says that, in the meantime, it’s business as usual, no changes for customers and ongoing investment. Most recently it confirmed development of a new technology stack for its credit and FX trade confirmation, clearing and regulatory reporting services.
The Ipreo acquisition is expected to close in the second half of 2018 and as a leading provider of capital raising and new issuance workflow across all asset classes and intelligence products will extend IHS Markit’s overall portfolio of products and solutions in financial services. For example, in private markets, Ipreo provides electronic workflow tools for fundraising, investor reporting and portfolio management that fit well with IHS Markit’s private debt valuations services. In capital markets, Ipreo deal syndication and roadshow services complement IHS Markit’s trade technology platforms for bonds and syndicated loans.
Uggla concludes: “Across multiple product lines, we will be able to deliver a more comprehensive service that will allow clients to streamline their workflow and make quicker and better decisions.”