New York, NY – Last week, Chicago-based mutual fund rating and investment research firm, Morningstar, Inc. unveiled its latest acquisition — the $55 million agreement to purchase Standard & Poor’s mutual fund database.
The deal with S&P, which will expand Morningstar’s international presence, represents “an important investment for us and a critical component of our research platform,” said founder and Chief Executive Joe Mansueto.
The assets Morningstar is acquiring from S&P include mutual fund data on performance, rankings and holdings on more than 135,000 funds in over 30 countries. The sale includes desktop applications and data feed products. About 80 percent of the funds included in the S&P database are outside the U.S.
Under the agreement, Standard & Poor’s will license mutual fund data from Morningstar for use in S&P’s fund ratings and research products and services.
S&P’s sale of its mutual fund database was positioned as a strategic step to help the firm focus its resouces and attention on its global fund ratings and research business. Historical fund data is used as a screen for S&P’s fund ratings and research business, though it is not seen as core to their fund ratings and analysis business.
Morninstar, on the other hand, saw the acquisition as a way to expand its mutual fund coverage — particularly outside the U.S. The S&P acquisition was also the latest in a round of acquisitions for Morningstar to aggressively grow its global product suite and customer base.
We have included both Morningstar and S&P’s Press Releases announcing the acquisition below.
Morningstar, Inc. to Acquire Standard and Poor’s Mutual Fund Data Business
Acquisition to strengthen Morningstar’s global database and presence in Europe
CHICAGO, Feb. 22 /PRNewswire-FirstCall/ — Morningstar, Inc., (Nasdaq:
MORN), a leading provider of independent investment research, and Standard & Poor’s, a division of The McGraw-Hill Companies, (NYSE: MHP), have entered into a definitive agreement for Morningstar to acquire Standard & Poor’s mutual fund data business for $55 million in cash, subject to post-closing adjustments.
Standard & Poor’s fund data business consists of data and products covering more than 135,000 managed investment vehicles, including mutual funds, exchange-traded funds (ETFs), hedge funds, and offshore funds. Under terms of the agreement, Standard & Poor’s will license fund data from Morningstar after the acquisition is completed. The companies expect to complete the transaction in March, subject to customary
“With the acquisition of Standard & Poor’s fund data business, we
believe we’ll have the most extensive global database for managed
investment products in the industry. The combination of Morningstar’s
industry-standard investment data and Standard & Poor’s international
mutual fund data will significantly strengthen our global database and our
offerings to investors,” said Joe Mansueto, chairman and chief executive
officer of Morningstar. “Our high-quality data forms the foundation of our
business. It’s an important investment for us and a critical component of
our research platform.”
“Additionally, Morningstar will have a much stronger presence outside
the United States, particularly in Europe, where Standard & Poor’s has
operated for more than 20 years. Our fund data businesses complement each other well, and Morningstar’s new and existing clients worldwide will
benefit from having a complete investment data and research solution from a single provider,” he added.
Key benefits of the acquisition:
* Morningstar will have the most extensive global database for managed
products. The combination of Morningstar’s high-quality,
industry-standard investment data and Standard & Poor’s international
fund data will strengthen Morningstar’s global database and offerings
* The acquisition complements one of Morningstar’s key growth strategies, which is to expand its brand, presence, and products for investors, advisors, and institutions around the globe. Approximately 80 percent of Standard & Poor’s mutual fund data business is outside the United States. The acquisition will give Morningstar a much stronger presence outside the United States, particularly in Europe.
* The acquisition will significantly expand Morningstar’s client base and
media partnerships in Europe and Asia. More than 1,100 institutions
around the world use Standard & Poor’s fund data products, and
Morningstar expects to extend its reach to about 10,000 new advisors
outside the United States. Upon completion of the acquisition,
Morningstar expects to provide investment data to more than 200
publications and media outlets worldwide.
* Morningstar’s existing clients and the former Standard & Poor’s fund
data clients worldwide will benefit from having a complete solution
from a single provider.
— The acquisition will significantly enhance Morningstar’s
institutional software offering. Standard & Poor’s Workstation
product, a fund performance and analysis system for asset managers,
has been very successful in Europe and Asia and complements
Morningstar Direct, Morningstar’s flagship global investment
research platform for institutions.
— Standard & Poor’s has a successful mutual fund data feeds business
and several products for financial advisors, which also complement
Morningstar provides data on more than 190,000 investment offerings,
including nearly 130,000 managed products such as mutual funds, ETFs,
insurance and pension funds, separate accounts, and hedge funds. The
company has more than 165 analysts around the world and provides
independent research and analysis on more than 2,000 mutual funds and ETFs as well as 1,900 stocks. Morningstar provides quantitative star ratings on nearly 25,000 distinct mutual fund portfolios and ETFs globally.
For more information, please see the accompanying Q & A, which is
available at http://global.morningstar.com/SP.
About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment
research in the United States and in major international markets. The
company offers an extensive line of Internet, software, and print-based
products and services for individuals, financial advisors, and
institutional clients. The company has operations in 15 countries and
ownership interests in companies in three additional countries.
Safe Harbor Statement under the Private Securities Litigation Reform
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are, in some cases, beyond our control and that could materially affect
actual results, levels of activity, performance, or achievements.
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activity, performance, or achievements can be found in Morningstar’s
filings with the SEC, including Morningstar’s Annual Report on Form 10-K
for the year ended Dec. 31, 2005. If any of these risks or uncertainties
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Media: Margaret Kirch Cohen (in Chicago), 312-696-6383,
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SOURCE Morningstar, Inc.
S&P sells mutual fund data business to Morningstar
In order to focus resources on its core analytical services for the global fund industry, Standard & Poor’s, the world’s foremost provider of independent credit ratings, indices, investment research, risk evaluation, and information services announced today that it is selling its mutual fund data business to Morningstar, (Nasdaq: MORN).
Standard & Poor’s continues to experience increasing demand from wealth managers and leading fund distributors for its independent fund ratings and research, which include fund management ratings, fund research and selection services, and money market and bond fund ratings.
“Our market-leading qualitative fund ratings and research business has grown significantly over the last few years, specifically our fund management ratings business, which currently rates over 2,200 funds globally,” said Deven Sharma, Executive Vice-President at Standard & Poor’s. “As a result, we have ambitious plans to expand the fund ratings and research business by widening the pool of funds that we rate, increasing our research capacity and developing additional distribution channels throughout the world for our market-leading analysis and opinions. Our fund management ratings supplement quantitative historical performance with qualitative fund manager evaluation.”
Consistent with this strategy, Standard & Poor’s announced that it is selling its mutual fund data business to Morningstar, which includes mutual fund data on performance, rankings and holdings on more than 135,000 funds in over 30 countries. The sale includes desktop applications and data feed products.
Under the agreement, Standard & Poor’s will license mutual fund data from Morningstar for use in Standard & Poor’s fund ratings and research products and services.
“Standard & Poor’s market-leading fund management ratings, money market and bond fund ratings, and fund selection services are widely recognized throughout the world for their objectivity, analytical rigor and value as forward-looking investment tools,” continued Sharma. “Historical fund data is used as a screen for our fund ratings and research business, but is not core to our business of providing independent qualitative ratings and analysis for the global fund industry.”