Another big merger of commercial real estate information companies got under way when Chicago-based investment research firm Morningstar (Nasdaq:MORN) announced recently that it has agreed to acquire Realpoint LLC, headquartered in Horsham, Pa., which specializes in structured finance data.
According to Morningstar, the purchase price is $52 million, subject to post-closing adjustments, and includes approximately $42 million in cash and $10 million in restricted stock. Realpoint had revenue of approximately $12 million in 2009.
“We believe there’s strong demand for unbiased ratings and research in the structured credit market, and we think the time is ripe to bring more competition to this market. This acquisition also builds on our recent entry into corporate credit ratings,” said Joe Mansueto, chairman and CEO of Morningstar.
Realpoint has built a solid business by being a reliable source for structured finance ratings and analysis, added Mansueto. “Realpoint and Morningstar share a strong commitment to investors. Together, we want to restore credibility to the credit ratings business and be a positive force in rating structured products.”
Realpoint currently offers securities ratings, research, surveillance services, and data to help institutional investors identify credit risk in commercial mortgage-backed securities. More than 225 institutional investment firms subscribe to Realpoint’s trusted ratings and analytics, including the majority of money managers who invest in commercial mortgage-backed securities.
“Realpoint and Morningstar have highly complementary values and are focused squarely on the best interests of investors,” said Robert Dobilas, CEO of Realpoint.
Becoming part of Morningstar will give Realpoint the resources to expand its business on a global level, said Dobilas. “At a time when market uncertainty is unprecedented, Morningstar’s acquisition of Realpoint demonstrates a firm commitment to re-establishing faith in structured finance ratings.”