Deutsche Börse has announced it is acquiring US-based risk management and portfolio analytics provider Axioma for US$850 million cash and debt free.
According to Deutsche Börse, Axioma will be combined with its index businesses, STOXX® and DAX®. The combined entity will offer a broad suite of index and analytics products with global coverage. As a result, it is expected to materially grow revenue and EBITDA, and is expected to achieve annualized pre-tax run-rate synergies of around €30 million by the end of 2021.
Current Axioma CEO Sebastian Ceria will lead the combined company. He claims the deal will create a growth company that is uniquely equipped to help clients capitalize on the critical trends now reshaping the investment-management landscape.
“The combination of STOXX’s indexing expertise with Axioma’s best-of-breed analytical capabilities in risk management, portfolio construction and performance attribution is expected to result in strong near-term revenue synergies and the creation of a platform for future growth,” Ceria said.
As part of the transaction, Deutsche Börse entered into a strategic partnership with General Atlantic, a leading global growth equity investor. General Atlantic will invest around US$715 million into the new company, which will be used to finance the acquisition of Axioma.
“This transaction is a step change for our pre-trading business and fully in line with our Roadmap 2020 strategy, which, besides organic growth, builds on programmatic M&A and new technologies,” Deutsche Börse CEO Theodor Weimer added. “We are also excited about the partnership with General Atlantic and believe it will help to further accelerate the growth of the combined business and to achieve strong value creation.”
The deal is subject to approval by the relevant competition authorities and further customary conditions and is expected to close in the third quarter of 2019.