Sebastian Ceria – CEO, Axioma

Deutsche Börse announced that it is acquiring USA based Axioma Inc for $ 850 million cash and debt free,combining the company with its index business (STOXX® and DAX®) for a valuation of € 2.6 million for the new company.

The combination of Axioma, cloud-based portfolio and risk management software solutions provider, and Deutsche Börse’s index business is expected to achieve annualized pre-tax run-rate synergies of around EUR 30 million by the end of 2021 according to the management. The combined company is to be led by current Axioma CEO Sebastian Ceria.

Sebastian Ceria, commented, “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.”

Deutsche Börse and Axioma have an existing partnership since 2011, jointly delivering products such as factor indices and ETF products. The new combined entity will be a fully integrated, buy-side intelligence player providing unique products and analytics through an end-to-end platform.

Theodor Weimer, CEO of Deutsche Börse, commenting on the deal, said, “This transaction is a step change for our pre-trading business and fully in line with our Roadmap 2020 strategy, which besides organic growth builds on programmatic M&A and new technologies.

The transaction also involves global growth equity firm, General Atlantic who will invest around $ 715 million into the new company, which will be used to finance the acquisition. Deutsche Börse will own 78% of the combined entity with General Atlantic stake around 19 %, and the Axioma management having around 3%. The transaction is expected to close in the third quarter 2019.

Founded in 1998, Axioma is a global provider of multi-asset class portfolio and risk management software solutions. The company delivers proprietary solutions and data services offerings to over 400 leading asset managers, asset owners, sell-side participants and hedge funds.

by Niket Jithra