General Atlantic Buys Stake in Markit
January 27, 2010
General Atlantic, the Greenwich, Conn-based private equity firm, has bought a 7.5 percent stake in data, valuation and post-trade processing service provider Markit for $250 million, officials at Markit confirmed today.
Markit also confirmed that the transaction values Markit at over $3 billion.
Terms of the deal were not disclosed when first announced by Markit late last night. At the time Markit would only say that General Atlantic’s “substantial equity investment” would give its chief executive Bill Ford, a seat on Markit’s board.
“As a financial information services industry leader, Markit is well-positioned to deliver the independent, high-quality products and services that market participants needs,” said Ford in a statement. Ford added that General Atlantic will assist Markit in developing its growth strategy further and executing “value-creating acquisitions.”
Markit was founded in 2001 as a unit of Toronto Dominion Bank affiliate TD Securities to provide pricing of credit default swaps. Since its inception it has expanded through a series of acquisitions and other deals into the lucrative post-trade processing arena where buy and sell side firms are being pressured by regulators to reduce their market, counterparty and operational risks.
In 2006 Markit purchased New York-based derivatives documentation firm Communicator and the following year bought London-based SwapsWire, an OTC derivatives confirmation platform which it renamed Markit Wire. In 2008, Markit teamed up with Depository Trust & Clearing Corp. to create a new company that combines the strengths of Markit’s front- and middle-office trade processing services with DTCC Deriv-Serv’s confirmation and matching services. And last month, Markit said it completed its takeover of ClearPar, an automated syndicated loan operations platform used to settle par and distressed loan trades in the U.S. and Europe.
Established in 1980, General Atlantic manages about $15 billion in assets. The firm has committed more than $1 billion in growth equity capital in the past six months, including more than $500 million in the financial services industry. In October 2009, it was among a consortium of investors that bought First Republic Bank, Bank of America’s $1 billion private wealth management business.
