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Transactions

April 2018
New York, NY
has sold Financial Engineering Associates, Inc. to
Dallas, TX
A portfolio company of


Background

In 1989, Professor Mark Garman, co-author of the “Garman-Kohlhagen” option pricing formula, founded Financial Engineering Associates (FEA). Over the next 13 years, he established the company as a leading provider of derivative instrument investment tools, physical asset optimization and securities analytics. In 2002, BARRA acquired FEA and shortly after, in 2004, MSCI acquired BARRA. Under the direction of new leadership in Frank Cummings, FEA grew and became profitable, serving more than 100 long-tenured clients with world-class quantitative risk tools. Its 100+ pricing models help traders and risk managers for the value, model and hedge of physical assets and derivatives across the energy, metals and commodity asset classes.



Overview

In 2017, MSCI hired M&A to advise them on the best way to divest the FEA business. M&A has extensive experience in advising buyers and sellers of data and analytics companies broadly as well as advising on relevant transactions in the energy and commodities software space.

One challenge of this assignment was that many elements of FEA’s support infrastructure had been integrated into that of MSCI. M&A worked with MSCI and FEA management to resolve separation issues, create a compelling information memorandum, build a comprehensive data room, identify potential partners, and advise on negotiating strategy, value and structure. Following a thorough review of options, MSCI accepted an offer from the Allegro Development Corp. (“Allegro”) to acquire the FEA business and combine it with its CTRM software. Allegro plans to integrate FEA into its existing commodity trading and risk management software and offer world-class analytics to its more than 100 clients.

M&A Role

Marlin & Associates served as exclusive strategic and financial advisor to MSCI and FEA on a complex corporate carve-out. M&A led the preparation of detailed transaction marketing materials, conducted initial discussions with interested parties, facilitated information exchange, advised on the negotiation and evaluation of alternative offers, managed preliminary and confirmatory due diligence reviews, and coordinated the preparation of final legal documents.

Press

Marlin & Associates Advises MSCI on its sale of FEA to Allegro

April 25, 2018
MSCI ANNOUNCES SALE OF FEA®

 

NEW YORK--(BUSINESS WIRE)-- MSCI Inc. (NYSE:MSCI), a leading provider of research-based indexes and analytics, announced today that it has completed the sale of Financial Engineering Associates, Inc., (FEA®) to Allegro Development Corporation, a global leader in Commodity Management software and solutions. The terms of the transaction, including the purchase price, were not disclosed.

FEA is a widely used and accepted set of risk and valuation tools for the energy and commodity markets, and the product line was included within MSCI's Analytics segment. The transaction is not expected to have a material impact on MSCI's results of operations, and MSCI remains committed to its previously communicated guidance for 2018.

Henry A. Fernandez, Chairman and Chief Executive Officer of MSCI, said, "This move allows MSCI to continue to execute on our growth strategy, focus on innovation and help our global clients achieve their investment objectives more effectively and efficiently."

Davis Polk & Wardwell LLP acted as legal advisers and Marlin & Associates, LLC acted as financial advisers to MSCI.

About MSCI

For more than 40 years, MSCI's research-based indexes and analytics have helped the world's leading investors build and manage better portfolios. Clients rely on our offerings for deeper insights into the drivers of performance and risk in their portfolios, broad asset class coverage and innovative research.

Our line of products and services includes indexes, analytical models, data, real estate benchmarks and ESG research.

MSCI serves 99 of the top 100 largest money managers, according to the most recent P&I ranking.

For more information, visit us at www.msci.com. 

Website and Social Media Disclosure

MSCI uses its website and corporate Twitter account (@MSCI_Inc) as channels of distribution of company information. The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive email alerts and other information about MSCI when you subscribe to the notification service available through MSCI's Investor Relations homepage by visiting the "Email Alert Subscription" section at http://ir.msci.com/alerts.cfm. The contents of MSCI's website and social media channels are not, however, incorporated by reference into this release.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation, our full-year 2018 guidance. These forward-looking statements relate to future events or to future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these statements. In some cases, you can identify forward-looking statements by the use of words such as "may," "could," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "predict," "potential" or "continue," or the negative of these terms or other comparable terminology. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond our control and that could materially affect our actual results, levels of activity, performance or achievements.

Other factors that could materially affect actual results, levels of activity, performance or achievements can be found in MSCI's Annual Report on Form 10-K for the fiscal year ended December 31, 2017 filed with the Securities and Exchange Commission ("SEC") on February 26, 2018 and in quarterly reports on Form 10-Q and current reports on Form 8-K filed or furnished with the SEC. If any of these risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary significantly from what MSCI projected. Any forward-looking statement in this press release reflects MSCI's current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to MSCI's operations, results of operations, growth strategy and liquidity. MSCI assumes no obligation to publicly update or revise these forward-looking statements for any reason, whether as a result of new information, future events, or otherwise, except as required by law.

 

 

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