Moody’s Corporation announced that it has agreed to acquire Regulatory DataCorp (RDC), a leading provider of anti-money laundering (AML) and know-your-customer (KYC) data and due diligence services, for $700 million. The deal complements Moody’s 2017 acquisition of company data provider Bureau van Dijk (BvD), creating a global leader in compliance solutions, BvD’s fastest-growing business segment.
The deal deepens BvD’s information portfolio and analytical capabilities by adding RDC’s unique, comprehensive dataset. It will also extend RDC’s global presence to a broader group of financial institutions, corporations, insurance companies and government agencies served by Moody’s Analytics and BvD.
RDC’s proprietary Global Regulatory Information Database (GRID) helps companies assess counterparties through a lens of more than 60 risk types by examining over 120,000 global sources, including adverse media coverage, politically exposed persons, government sanctions and regulatory watchlists. RDC’s platform incorporates industry-leading artificial intelligence (AI) for compliance screening to help process customer requests at greater speeds and accuracy while reducing false positives.
“RDC’s comprehensive data and leading technology are at the forefront of the global effort to identify sources of counterparty risk and to prevent criminal infiltration of the financial system,” said Dan Russell, Executive Director of the Bureau van Dijk division of Moody’s Analytics. “The addition of RDC’s proprietary data and technology to BvD’s comprehensive company information offerings provides an industry-leading platform that will help customers make better informed decisions as they manage AML and KYC risks and requirements.”
RDC is currently owned by Vista Equity Partners (Vista), a leading investment firm focused on enterprise software, data and technology-enabled businesses.
The transaction is expected to close in the first quarter of 2020, subject to the satisfaction of customary closing conditions, including the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The transaction will be funded with a combination of cash on hand, commercial paper and debt financing. Moody’s expects the acquisition of RDC to generate approximately $55 million of annualized revenue in 2020, and to be accretive to earnings per share on an adjusted basis in 2022. Due to the estimated impact of amortization expense relating to acquired intangible assets, the transaction is expected to be accretive to earnings per share on a GAAP basis in 2024.
Including the impact of this transaction, Moody’s anticipates share repurchases for 2020 to total approximately $1.3 billion, subject to available cash, market conditions and other ongoing capital allocation decisions. Share repurchases during 2019 totaled approximately $1.0 billion. Moody’s received legal counsel from Paul Hastings LLP. UBS Investment Bank served as exclusive financial advisor and Kirkland & Ellis LLP served as legal advisor to RDC and Vista.