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June 2, 2011 9:17 pm
Thomson Reuters has kicked off the process of selling Kondor, its trade and risk management software business, by sending information to potential buyers. The division could fetch up to $500m.
The disposal of Kondor has drawn interest from both trade and private equity bidders. The latter include CVC, Hellman & Friedman, 3i, Warburg Pincus and Advent.
One person close to the talks said CVC was seen as one of the frontrunners. Barclays is advising Thomson Reuters.
Potential trade buyers are likely to include Kondor’s competitor Summit, which is owned by Misys, the British IT solutions business. Misys declined to comment.
Kondor’s other main competitors include Murex, a French software solutions company, and Sungard of the US.
Kondor is the flagship product in Thomson Reuters’ global risk management division. It provides trade and risk software as well as liquidity risk systems for treasury and cash management operations. Banks are its core customers.
Thomson Reuters expects to generate $1bn from disposals this year giving it more money to spend on acquisitions.
Tom Glocer, chief executive of Thomson Reuters, wants to build up growth areas such as governance and compliance, operations in Latin America and products for energy markets.
Thomson Reuters spent $850m on acquisitions last year, or about half its $1.6bn free cash flow. This year, with free cash flow expected to increase 25 per cent to $2bn, the ratio is expected to be similar, but the group would also be able to use disposal proceeds.
It has previously announced the disposals of its Scandinavian legal and tax and accounting unit and BARBRI, a legal training product, as well as the planned disposal of Portia, an accounting tool for institutional investors’ portfolios.
Kondor started life as a French company called Effix and was acquired in 1993 by Reuters. It was run semi-independently until 2000 when it was integrated with the larger Reuters business.
Thomson Reuters employs 900 staff at Kondor across 46 countries but more than half are based in France, the UK and Poland.
There has been other deal activity in this sector over the past 12 months. Last year Warburg Pincus and fellow private equity firm Silver Lake bought financial services group Interactive Data Corporation from Pearson, the owner of the Financial Times, for $2bn.
IDC is a significant participant in the business information sector, particularly in the pricing of illiquid assets. The sale attracted interest from US buy-out groups including Bain, Advent and CVC.
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