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MSCI acquires Riskmetrics
Monday 01 March 2010

US investment analysis and market indices company MSCI Inc (NYSE:MXB) has agreed to buy risk management firm Riskmetrics Group Inc (NYSE:RISK) for USD21.75 (EUR16.15) a piece in cash and stock.

The two companies yesterday announced the deal, whose price is based on the 26-February closing price of Riskmetrics´ stock of USD29.98. The transaction´s total value stands at some USD1.55bn.

The deal is expected to close in the third quarter of MSCI´s fiscal year, which ends on 30 November.

MSCI´s offered price per Riskmetrics share includes USD16.35 in cash and 0.1802 of own stock. The firm will finance the cash part of the acquisition with existing resources and an USD1.375bn loan.

Henry Fernandez, MSCI´s chairman and CEO, said the deal is a key point in the firm´s efforts to become a leader in the market of investment decision support tools. He added the acquisition will bring significant cost-saving synergies and revenues.

After the transaction the integrated company will have some USD750m of revenues and 2,000 employees in 20 countries.

The deal has been approved by the companies´ boards of directors but still needs Riskmetrics´ shareholders´ approval.

Watchdogs still have not ruled on the purchase either.

A financial advisor for MSCI is Morgan Stanley (NYSE:MS). Davis Polk & Wardwell LLP serves as legal counsellor, while UBS (NYSE:UBS) provides a fairness opinion to MSCI´s board of directors.

Evercore Group LLC serves as financial advisor for Riskmetrics and Kramer Levin Naftalis & Frankel LLP provides the legal counsel.

Date Published: 01/03/2010
Target: RiskMetrics Group Inc
Country: USA
Deal Size: 1.5bn (USD)
Sector: Banking/Financial services
Type: Corporate acquisition
Financing: Debt, Cash & Stock, Existing resources
Status: Agreed
Buyer: MSCI Inc
Vendor Advisor: Evercore Group L.L.C., Kramer Levin Naftalis & Frankel LLP
Buyer Advisor: Morgan Stanley, UBS, Davis Polk & Wardwell LLP