Moody’s announced this morning that they are acquiring business intelligence vendor Bureau van Dijk for €3.0 billion (approximately $3.27 billion). Moody’s stated that “the acquisition extends Moody’s position as a leader in risk data and analytical insight.” The deal is subject to EU approval and is expected to close in Q3.
Bureau van Dijk will be acquired with approximately $1.3 billion in offshore cash and $2 billion in debt. Bureau van Dijk will be folded into Moody’s Analytics’ Research, Data & Analytics (RD&A).
Last year, Bureau van Dijk earned $281 million (€258 million) and posted and EBITDA of $144 million (€132 million). Bureau van Dijk has a ten-year Compound Average Growth Rate (CAGR ) of 9.3%. The firm anticipates $45 million of annual revenue and expense synergies by 2019 and $80 million by 2021.
Bureau van Dijk offers three major product lines:
- Orbis – Financial analysis tools spanning 220 million companies. Information includes firmographics, public and private company financials, original documents, global family trees, shareholdings, news, and M&A research (Zephyr). Orbis provides the deepest set of global private company financial coverage tied to very strong linkage data including minority shareholdings. Orbis was redesigned last year with a new user interface and workflows. The Orbis product line is also available as regional and local products such as Amadeus in Europe, Oriana in AsiaPac, and Fame in the UK.
- Mint – Sales intelligence product line
- Catalyst – Set of workflow tools for valuation, transfer pricing, credit analysis, wallet sizing, etc.
All three product lines leverage the Orbis global company file which is collected from 160 information partners.
“Bureau van Dijk is a high growth information aggregator and distributor that positions Moody’s at the center of a unique network of global risk data,” said Raymond McDaniel, President and Chief Executive Officer of Moody’s. “This acquisition provides significant opportunities for Moody’s Analytics to offer complementary products, create new risk solutions and extend its reach to new and evolving market segments.”
The Bureau van Dijk customer base is split fairly evenly across 6,000 financial institutions, professional service firms, government authorities, and corporations. Key use cases include compliance, KYC/AML, risk decisioning, purchasing, transfer pricing, B2B sales and marketing, financial analysis, and economic research.
Moody’s listed a three-pronged product strategy post-acquisition:
Apply MA analytics to data to generate off-the-shelf financial metrics
Package BvD data subscriptions with MA analytical software & models
Enrich MIS/MA data sets with BvD’s proprietary identifiers
Moody’s will also be looking to extend Bureau van Dijk’s commercial presence beyond Europe and to non-financial customers. The acquisition helps Moody’s extend its addressable market beyond credit to provide “Moody’s-branded scores/assessments for tax risk, transfer pricing, compliance, financial crime, [and] supply chain management.”
“Moody’s is a highly regarded, authoritative source of credit ratings and analytical tools, with a strong brand and global reach,” said Mark Schwerzel, Deputy CEO of Bureau van Dijk. “The addition of Bureau van Dijk’s powerful information platform to Moody’s Analytics’ suite of risk management solutions presents a wide range of opportunities for us to better serve our combined customer base.”
Bureau van Dijk has been owned by a series of private equity firms with EQT acquiring the firm from Charterhouse Capital Partners in September 2014. At the time, the sale price was not disclosed. Charterhouse acquired Bureau van Dijk in 2011 from BC Partners for €960m.
EQT noted the following areas of investment during its ownership period:
Development of the organisational structure to prepare for further growth
Investments in the sales organization, including the introduction of a matrix sales structure, implementation of a global CRM system, and expansion of the salesforce
Strong focus on the development of new products and continued improvement of existing ones, e.g. the launch of a new user interface
Substantial investments in marketing and corporate branding