Markit Ltd. - 500 Beiträge pro Seite

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http://www.valuewalk.com/2016/04/kerrisdale-partners-3q15-le…

Markit (MRKT), a leading financial services information provider trading at 20x LTM FCF.

Markit provides critical infrastructure for the credit markets. When Markit was founded in 2003, its key function was helping banks accurately price credit default swaps and other complex financial securities that lacked transparent prices and did not trade on traditional exchanges. Markit developed a unique give-and-get model, a system in which banks feed their pricing data to Markit in return for access to aggregated data. With this platform as a foundation, Markit methodically expanded in adjacent tools.

Ten years later, Markit generates over $1 billion of revenue and has a broad portfolio of mission-critical products serving asset managers, hedge funds, banks and other large financial institutions. Today, the company operates a suite of products that benefit from high barriers to entry, a highly recurring revenue base, 30% operating margins and 100% FCF conversion. The company’s valuation has been hampered by pessimism towards Markit’s processing segment: as certain, high-volume derivatives trading becomes more transparent and transitions towards swap execution facilities (as opposed to traditional bilateral arrangements), Markit is expected to lose some business in the near-term. We are confident that management will successfully navigate around this issue and that the company’s valuation will ultimately re-rate to be more in line with peers as concerns subside.

In 2014, 95% of Markit’s revenue base was recurring. Discussions with Markit’s customers explain why: the portfolio of products is strong, switching costs are high, and over time customers subscribe to more products (not fewer), making it extraordinarily difficult to replace Markit with a competing vendor. Many customers claimed that even if prices increased significantly, they would find it difficult to replace Markit’s products, including its CDS/Loan pricing, WSO, and (for equity investors) the daily short interest tool product.

One of Markit’s leading offerings (~14% of total revenue) is the WSO platform. WSO software provides a comprehensive loan portfolio platform for reporting, accounting, compliance and performance analytics for customers in the syndicated bank loan market. Credit investors are typically invested in hundreds of loan tranches across numerous issuers, creating a sea of idiosyncratic data to maintain – each loan has hundreds of terms that can vary widely across securities. Interest payments and calculations are calculated on a quarterly basis while CLO testing is done monthly, and sometimes the documentation between the issuer’s agent and the investor is still delivered via fax.

Markit adds value to this process by acting as the intermediary between the investor (client) and all the issuers’ agents. WSO collects all the data inputs and centralizes it in one database that is easily accessible by the investor. This platform saves the investor significant time and resources as less time and people are needed for this manual data entry process. We spoke to some customers who told us that, prior to WSO, they would have employees sitting by the fax machines and manually inputting this data, resulting in an extremely inefficient data input process. Further, WSO’s close integration with middle/back office operations makes it cumbersome to replace, though few customers ever wish to.

Markit is also widely regarded as the best source for loan, CDS pricing, and reference data. Under a give-and-get model, Markit receives proprietary loan and CDS valuation data from the partner banks. Markit aggregates this data and returns the valuations to all of its customers. Access to this proprietary information flow allows Markit to provide the highest quality data to its customers. The Totem product showcases Markit’s ability to retrieve pricing data for illiquid and OTC securities. Totem provides market prices for a broad range of derivatives (including CDS, interest rate swaps, commodity swaps) to OTC derivative market-makers (mostly sellside banks). As shown below, Totem’s coverage goes well beyond the prices available from brokers, making it indispensable for regulatory reporting and daily VaR calculations.

[R-BgO]

ups, da läuft ein dicker Merger

(immerhin scheint Markit die "überlebende" Aktie zu sein):


March 21, 2016

IHS and Markit to merge, creating a global leader in critical information, analytics and solutions


LONDON & ENGLEWOOD, Colo.--(BUSINESS WIRE)--IHS (NYSE: IHS) and Markit (NASDAQ: MRKT) today announced the signing of a definitive agreement under which the companies will combine in an all-share merger of equals to create a global leader in critical information, analytics and solutions. Based on the closing prices of IHS and Markit common stock on March 18, 2016, the implied equity value of the transaction is more than $13 billion. The transaction has been unanimously approved by the Board of Directors of each company.

Upon completion of the merger, the combined company will be renamed IHS Markit and will be headquartered in London and have certain key operations based in Englewood, Colorado. IHS shareholders will own approximately 57 percent and Markit shareholders will own approximately 43 percent of the combined company on a fully diluted basis. IHS shareholders will receive 3.5566 common shares of IHS Markit for each share of IHS common stock, which based upon the IHS closing price of $110.71 on March 18, 2016, implies a per share price of Markit common shares of $31.13.

IHS Markit will be a leader in critical information, analytics and solutions, and will have non-overlapping customers and products, a strong financial profile and a world-class management team. The company will also deliver next-generation information and analytics products to help customers improve decision making. IHS Markit will have more than 50,000 key customers, including 75 percent of the Fortune Global 500, creating significant cross-selling opportunities across multiple commercial industries and governments.

The combined company’s reported results for fiscal year 2015 include approximately: $3.3 billion in revenue, $1.2 billion in adjusted earnings before interest, taxes depreciation and amortization (EBITDA), and $800 million in free cash flow.

Jerre Stead, IHS Chairman and Chief Executive Officer, said, “This transformational merger brings together two information-rich companies to create a powerful provider of unique business intelligence, data and analytics to a broad and complementary customer base. IHS Markit and its shareholders will benefit from enhanced product innovation to deliver strong returns across economic cycles. Importantly, the two companies are values-based organizations that have a strong cultural fit which focuses on customer satisfaction and colleague success.”

Lance Uggla, Chairman and Chief Executive Officer of Markit, said, “This is an exciting transaction for customers, employees and shareholders of IHS and Markit. Together, we will create a global information powerhouse and a platform for innovation that drives future revenue. At the heart of our shared vision is the opportunity to offer our customers a broader and richer content set through both existing and new products that will support their critical decision making and manage regulatory change. The combination will enhance cash flow and enable stronger returns of capital to shareholders.”

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Antwort auf Beitrag Nr.: 52.414.716 von R-BgO am 16.05.16 10:58:16

Merger ging durch

Thread: IHS Markit

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block-creator

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Friedhof der Übernommenen