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Deutsche Börse to acquire Axioma
Posted on Wednesday, 10 April 2019 09:46
Deutsche Börse is purchasing US risk management analytics group Axioma for USD 850.00 million on a cash- and debt-free basis.
The acquiror plans to combine the target with its index businesses – STOXX and DAX – creating a fully-integrated leading buy-side intelligence player that will provide unique products to meet the growing demand for an end-to-end platform.
Axioma’s chief executive Sebastian Ceria will run the new company, expected to be worth USD 2.60 billion following completion, slated for the third quarter of 2019.
While the deal remains subject to regulatory and competition approvals, Deutsche Börse has also entered into a strategic partnership with General Atlantic, which plans to pick up a minority stake in the new business.
Under the terms of the second agreement, the investor will inject an additional USD 715.00 million into the combined group, with the proceeds to be used, in part, to finance the acquisition of Axioma itself.
The target is billed as a global provider of cloud-based portfolio and risk management software, while Deutsche Börse’s index companies are highly complementary and together will offer a broad suite of analytics products with global coverage.
Combined, the groups are expected to materially grow revenue and earnings before interest, taxes, depreciation and amortisation (EBITDA), while achieving annualised pre-tax run-rate synergies of around EUR 30.00 million by the end of 2021.
Deutsche Börse is expected to hold 78.0 per cent of the new company after completion, General Atlantic will control 19.0 per cent, as a result of its cash injection, and the remaining 3.0 per cent will be owned by management following a USD 105.00 million investment.
Ceria noted: “The union of Axioma, STOXX and DAX under the Deutsche Börse umbrella creates a growth company that is uniquely equipped to help clients capitalise on the critical trends now reshaping the investment-management landscape.”
Founded in 1998, the target delivers proprietary services and data offerings to over 400 leading asset managers, owners, sell-side participants and hedge funds.
It generated USD 100.00 million in annual contract value revenue for 2018, which has grown at a compound annual growth rate of 23.0 per cent since 2010.
Deutsche Börse said its index unit is the fourth global player, based on revenue for the year ended September 2018, and the number one in Europe for tradable index, with EUR 168.00 million in gross turnover and EUR 115.00 million in EBITDA for last year.
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