IHS Markit scraps MarkitSERV sale after disagreement on value

IHS Markit’s chief executive said that it could not reach an agreement on the value of the post-trade derivatives processing business.

Data and analytics giant IHS Markit is no longer seeking a buyer for its post-trade derivatives processing unit, after failing to reach an agreement on the value of the business.

The company’s chief executive officer, Lance Uggla, detailed that the executive team at IHS Markit agreed the best financial and strategic outcome is to keep MarkitSERV, adding that the firm will continue to invest and build the unit, while on the IHS Markit recent earnings call.

“We completed a disciplined and comprehensive sales process with both strategic and private equity parties, and could not reach agreement at a sufficient value for the asset with an ongoing acceptable commercial relationship,” Uggla said.

“MarkitSERV has an integral part to play in the post-trade industry consolidation that we expect to occur in the coming years and continues to be a valued strategic partner across the whole financial markets. We look forward to continuing to invest and build this business, and we’ll take the lead in innovating and looking for opportunities to partner with the industry and our customers.”

MarkitSERV provides end-to-end processing and workflow services across over-the-counter (OTC) derivatives asset classes, including credit, equity, foreign exchange (FX) and interest rates.

Uggla added that putting MarkitSERV up for sale was reflective of the company’s belief that the post-trade derivatives  processing market should be consolidated, and that at a sufficient value level a sale could participate in that consolidation.

“We don’t see ourselves being highly acquisitive within derivatives processing, but we do think we made a lot of statement in the marketplace that there’s opportunities for the strategic consolidation of certain assets,” Uggla said.

“If some of the strategic market participants wish to discuss or participate in those types of activities, we’re going to be open to do that, but we’re also quite open to manage the asset.”

IHS Markit first announced plans to sell MarkitSERV in May, alongside confirmation of its acquisition of rival data company Ipreo for $1.9 billion. The company said at the time that following a detailed review of the financial services business, as part of its capital allocation strategy, it had begun the process of selling off the business.