The buy side invests in independent research firms


New York- Information and media giant Xinhua Finance Limited announced the sale of two of its companies, Mergent Inc., a US-based financial data provider, and Kinetic Information System Services, a UK-based consultancy and software provider for the financial market. The buyer: Carousel Capital, a US-based private equity fund. The price:  US $93.5 million, cash. The deal is to be closed this July after the completion of financing arrangements by Carousel.

The sale of the two information providers is part of Xinhua’s short-term strategy: to streamline operations and focus on its core business of providing information on China’s financial sector. This strategy, disclosed in the press release by the company’s CEO Jae Lie, might be related to the current economic challenges in the US. Today, the higher growth opportunities are emerging in China, rather than the US. Xinhua’s strategy apparently, and understandably, prioritizes to pursue the Asian growth opportunities while leaving behind the current economic hardships in the US.

Mergent, with headquarters in New York and Charlotte has been providing financial data for over a century. Its database includes more than 35,000 global publicly traded companies from 100 different countries. Kinetic, headquartered in London, delivers software products and consultancy to the financial market.

Xinhua acquired Mergent in 1994 in hopes of gaining an independent tool to develop its own financial market indices. With this acquisition 14 years ago, the Chinese giant also pursued the supply of the indices and the underlying data required by investors to measure their performance. Xinhua’s plans have scaled back since then, and now it will focus on providing information on China’s financial sector. Meanwhile, Carousel Capital, which has specialized in small leveraged buyouts and recapitalization transactions since 1996, will put its expertise into practice attempting to revitalize its two new acquisitions.


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