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Thomson Plans to Shake Up Competition through Primark Merger

In a deal valued at almost $842 million, Thomson Corporation is set to shake up the competition through its acquisition of Primark by broadening its reach and enhancing its products. The market data providers, both of which have a wide array of companies and products under them, expect the deal to go through sometime during the second half of this year

In a deal valued at almost $842 million, Thomson Corporation is set to shake up the competition through its acquisition of Primark by broadening its reach and enhancing its products. The market data providers, both of which have a wide array of companies and products under them, expect the deal to go through sometime during the second half of this year. The agreement bringstogether Thomson's strong North American presence with providers such as ILX and First Call and Primark's significant European market proliferation. By coming together, Thomson Financial looks to leverage Primark's reach and content abroad and look at ways to leverage several product and service offerings.

In terms of estimated numbers, the combination of installed market data terminals through ILX--a Thomson company, ICV, the Primark owned U.K.-based market data system provider, and A-T Financial--also a Primark unit--would reach about 165,000, says Bernie Weinstein, president and CEO of ILX. That could nudge Bloomberg, which has about 140,000 users, out of the number three spot in the market data competition line up. The Thomson/Primark user base would move in behind Reuters, which has about 477,000 users and Bridge, which has over 200,000 installed terminals.

Tom Porter, chairman and CEO of market data provider HyperFeed Technologies, says the shake up might not be as big as some say. He describes the proposed acquisition as an obvious extension in the consolidation trend that has been occurring in the market data industry over the past few years. "By comparison, if you look at the number of companies that Bridge has bought over the years, it's not that big of a move," says Porter. "The most significant part is the continuing consolidation in this market." He adds though that the merger is likely to help reduce costs for customers seeking compatability and additional capabilities, which they will now be able to receive through one vendor.

Primark, which has customers in 61 countries, is made up of four divisions. Primark Financial Information Division includes Datastream/ICV, Primark Investment Management Services (PIMS), Disclosure, Worldscope, Extel and A-T Financial. Primark Financial Analytics Division includes I/B/E/S, Baseline and Vestek and the Primark Decision Information Division is made up of The Primark Decision Economics (PDE) and WEFA. The Primark Data Company includes much of Primark's data acquisition, editing and processing products and services.

Thomson Financial also has a plethora of business units including First Call, AutEx, Thomson Financial ESG, Securities Information Center, Thomson Financial Investment Solutions, BETA Systems, ILX, digiTrade and Thomson Financial Research to name a few. "We have a series of teams made up of both Primark and Thomson Financial people who will be looking at integration details in the various businesses, including the European side," says Patrick Tierney, president and CEO of Thomson Financial. "The intention is to be able to start implementing a detailed plan as soon as we close the deal."

Because the acquisition has not been completed and is pending regulatory approvals here and abroad, Tierney would not elaborate on the exact details of the possible integrations. But he does explain some general areas that could be integrated in order to take advantage of the complimentary offerings each company brings to the table.

"We're going to be looking at how ILX and ICV can come together more closely," says Tierney, though he declined to specify how. "We'd also like to leverage the position that Data Stream has in Europe and I/B/E/S is another example where we want to fully leverage their position in Europe." The European expansion is vital as those markets are growing twice as fast as corresponding markets in the U.S. "This is going to allow us to reach those markets more effectively," he adds.

But the geographic reach is not the only factor that Thomson is planning on leveraging through the acquisition. "Primark has a number of analytic-rich products and businesses, like Baseline for example, which is an equity analytic tool for institutional portfolio managers, that we can take further," says Tierney. "We could take some current Thomson Financial content through Baseline, that's an attractive aspect." He also says that I/B/E/S and First Call could somehow be integrated further, to take advantage of I/B/E/S's quantitative platform.

"In general, when it comes to technology underpinning, just the increased scale that comes from this combination is going to make it much easier to leverage the technology and the investment in platforms," continues Tierney. He adds that in this day and age, customers are looking for more integrated information and service offerings and the option to do so through fewer suppliers with a broader range of services is also an important facet of the merger. The deal calls for a cash tender offer for all shares of Primark stock at $38 per share and is conditional on the tender of 51% of eligible shares, along with regulatory approvals.

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