Morningstar Inc. has announced its acquisition of DBRS, the world's fourth-largest credit ratings agency, for a purchase price of $669 million.
DBRS, which employs more than 500 people at seven locations, reported $167 million in revenue for the fiscal year ended Nov. 30, 2018, and it will continue to be led by its existing management team. Morningstar intends to name a leader of the combined businesses by the time the deal closes during the third quarter, and the companies said they would work together regarding the integration of operations. Morningstar stated that it would fund the transaction with a mix of cash and debt, which will include the placement of a new credit facility at closing.
"The chance to empower investors with the independent research and opinions they need across a multitude of securities first drove our decision to enter the credit ratings business," said Morningstar CEO Kunal Kapoor. "DBRS and Morningstar share research-centric cultures committed to rigor and independence. Together, we believe we can elevate the industry with the world's first fintech ratings agency backed by state-of-the-art models, modern technology, and expert research teams that issuers and investors can count on to deliver transparent and independent ratings."
DBRS CEO Stephen Joynt said, "DBRS's more than 40 years of experience and success coupled with Morningstar's proven capabilities will offer an even stronger global alternative to larger ratings agencies. Both DBRS and Morningstar are driven by similar core values that aim to bring more clarity, diversity, transparency, and responsiveness to the ratings process, which makes Morningstar a perfect fit for us."