German exchange operator Deutsche Börse is buying Axioma for $850 million and combining the analytics specialist with its index businesses in a new company.
US-based Axioma will be rolled in with Deutsche Börse-owned Stoxx and Dax in a new company with a valuation of EUR2.6 billion and led by Axioma CEO Sebastian Ceria.
As part of the deal, General Atlantic is pumping around $715 into the new company for a 19% stake. Deutsche Börse will own 78%, with the Axioma management holding three per cent in exchange for reinvesting around $105 million.
Founded in 1998, Axioma provides multi-asset class portfolio and risk management software. It claims more than 400 asset managers, sells-side participants and hedge funds as customers of its proprietary tech and data services.
Deutsche Börse says Axioma's offering is a good fit with its index business and that the combination will create a leading buy-side intelligence player that should create annualised pre-tax run-rate synergies of around EUR30 million by the end of 2021.
The partners argue that they are uniquely equipped to address trends that are reshaping investment management, including the shift to passive, the demand for smart beta and the transition towards index customisation using technology.
Says Ceria: "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 creation of a platform for future growth."
The deal is slated to close in the third quarter, subject to competition authority approval.