A-Team Insight Blogs

Rimes Technologies: Will They or Won’t They Sell?

Share article

Rimes Technologies won’t comment on a media report that it’s for sale. But a recent news item – published, surprisingly, by Dow Jones’ Barron’s investor newspaper – has sparked speculation on possible acquirers of this benchmark and reference data services provider.

Industry executives contacted by Data Management Insight suggest that Rimes could garner interest from the likes of FactSet, Bloomberg, IHS Markit and the London Stock Exchange, all of which have invested significantly in their benchmark data offerings in the recent years. Other prospective suitors mentioned by DMI contacts include Ultimus – a competitor that has caught VC attention in recent years.

Unsurprisingly, Rimes won’t comment on its possible sale. ABRY Partners, a Boston-based private equity firm that in 2017 took a minority stake in Rimes (the company’s first private equity investment) ‘to accelerate growth and enhance its processes’, did not respond to phone calls.

A privately held business set up in New York in 1996, initially providing managed data services, including index and benchmark services, and more recently solutions under the RegTech banner to buy-side asset managers, servicers and owners, Rimes now has over 300 institutional clients in 80 financial centres across 40 countries, and a workforce of over 200 employees. The company is led by Christian Fauvelais, CEO, president and cofounder.

For its part, Barron’s reported that Rimes is up for sale in the closing days of 2019, assigning the company a $400 million to $500 million valuation based on EBITDA of $20 million to $25 million. And while speculation around potential suitors is rife, in reality this level of valuation could limit interest to just a few big players.

FactSet’s interest would most likely be in RIMES’ capabilities, clients and overlap of benchmark services and clients. In 2017, the company bought BISAM Technologies, which Rimes’ integration platform supports as a performance measurement application.

IHS Markit could be another contender. It offers benchmark and index services, along with exchange traded funds (ETF) data management services – an area Rimes moved into last year – coupled to its enterprise data management (EDM) solutions.

Relatively new to market, Ultumus was set up by CEO and ex-Markit executive Bernie Thurston in 2016 and specialises in the distribution of index and ETF composition data. It competes head-on with RIMES and could bulk up its business through acquisition. The company declined to comment on any interest in RIMES.

On a broader scale, large exchanges and index providers may be among Rimes’ suitors as they look to strengthen their offerings and add clients. Witness the LSE’s 2014 acquisition of Russell Investments, an index compiler and asset manager. The LSE has since sold the asset management side of the business and expanded its indices business as demand for specialist market data has risen, making index compilers highly sought after.

Less well know is Ultumus, a relatively new company that was initially backed with seed funding from investment firm ETFS Capital in late 2016. It went on to receive second round funding from the firm in March 2019. In October 2019, ETFS Capital also invested in Moorgate Benchmarks, founded in 2018 and set up, like Ultumus, to drive change and more flexibility into the index industry while supporting EU Benchmarks Regulation.

With EU Benchmarks Regulation in force, Libor being replaced, challengers in the index industry such as Ultumus, Moorgate Benchmarks and Frankfurt-based Solactive keen to drive change, and customers consistently looking for greater transparency, the sale of Rimes could be a big deal in more ways than one.

Related content

WEBINAR

Upcoming Webinar: How Financial Institutions can adjust to working in the New Normal

Date: 8 September 2020 Time: 10:00am ET / 3:00pm London / 4:00pm CET The very sudden impact of Covid-19 and resultant shutdown of physical sites has stress-tested financial institutions and vendors to their limits. Now banks and firms are slowly starting to re-open offices. But what will the new normal look like and what steps...

BLOG

What’s New in Trading Technology? Upcoming Summit Hits all the Right Notes

At a time when the future of the EU trading environment is unclear, bringing together the European trading technology community could not be more critical. On 25 February, A-Team Group’s TradingTech Summit will convene for its ninth year to unite senior industry experts, practitioners, providers and observers in a high intensity forum to examine the...

EVENT

Data Management Summit USA Virtual

Data Management Summit USA Virtual will explore how sell side and buy side financial institutions are navigating the global crisis and adapting their data strategies to manage in today’s new normal environment.

GUIDE

Entity Data Management Handbook – Sixth Edition

High-profile and punitive penalties handed out to large financial institutions for non-compliance with Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations have catapulted entity data management up the business agenda. So, too, have industry and government reports on the staggering sums of money laundered on a global basis. Less apparent, but equally important, are...