Morningstar, Inc. has agreed to acquire Standard & Poor's (S&P) mutual fund data business for US$55million in cash, in a move expected to strengthen its global database, particularly in Europe.
S&P'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.
Once the purchase is completed S&P will license fund data from Morningstar. The companies expect to close the deal in March, subject to customary closing conditions.
Through the acquisition Morningstar expects to provide investment data to more than 200 publications and media outlets worldwide.
Morningstar will pick up S&P's clients in Australia and start producing the market share report.
S&P will now become a client of Morningstar, which according to Morningstar Australia CEO Scott Cooley, is not unusual. "Mercer, van Eyk and Lonsec are all clients," he said.
"The data business is really a scale business. If you're going to make money at it you need to sell it as widely as you can."
Cooley said Morningstar would be interviewing S&P employees next week and will make employment decisions from there.
Standard & Poor's fund data business employs about 170 people, primarily in Europe, Asia, and the United States.
"There are certain overlapping functions," he said.
Cooley had no comment on further acquisitions in the near future.
Morningstar Inc is the ultimate holding company of Investoinfo Ltd.
