Deutsche Börse buys $850m analytics firm Axioma

Deutsche Börse AG announced on Tuesday it will buy US risk and portfolio analytics firm Axioma for $850 million and combine it with Deutsche Börse’s index businesses.


“As part of the transaction, Deutsche Börse has entered into a strategic partnership with General Atlantic, a leading global growth equity investor,” said Deutsche Börse.

“General Atlantic will invest around USD 715 million into the new company, which will be used to finance the acquisition of Axioma.”

Deutsche Börse CEO Theodor Weimer said: “This transaction is a step change for our pre-trading business and fully in line with our Roadmap 2020 strategy, which besides organic growth builds on programmatic M&A and new technologies.

“We are also excited about the partnership with General Atlantic and believe it will help to further accelerate growth of the combined business and to achieve strong value creation.”

Axioma founder and CEO Sebastian Ceria said: “The union of Axioma, STOXX and DAX under the Deutsche Börse umbrella creates a growth company that is uniquely equipped to help clients capitalize on the critical trends now reshaping the investment-management landscape.

“The combination of STOXX’s indexing expertise with Axioma’s best-of-breed analytical capabilities in risk management, portfolio construction and performance attribution is expected to result in strong near-term revenue synergies and creation of a platform for future growth.”

Gabriel Caillaux, managing director and head of EMEA at General Atlantic, said: “We have closely followed the development of Deutsche Börse’s index assets for many years as we witness the global shift to passive products and the rise of indexed investing strategies.

“We are excited to be partnering with such a renowned firm. We are also highly impressed with Axioma’s track record and believe this combination provides a strong foundation for future growth.

“After our detailed analysis, we are confident that the combination will generate significant value creation and strong investor returns.”

Anthony Arnold, managing director at Goldman Sachs, said: “We have been delighted to support Axioma as both an investor and meaningful customer of their best-in-class solutions and wish the management team continued success as they grow what will be an important and leading focused business with a compelling product suite.”  

Axioma delivers proprietary services and data to over 400 asset managers, asset owners, sell-side participants and hedge funds.

Axioma generated approximately $100 million in annual contract value (ACV) revenue in 2018.

The combined company will be led by current Axioma CEO Ceria.

A number of the Axioma management team, as current owners, will reinvest around $105 million of their sales proceeds into the combined company alongside General Atlantic.

As a result, and depending on the roll-over, Deutsche Börse is expected to own approximately 78 percent of the new company, General Atlantic around 19 percent, and the Axioma management about 3 percent. 

Perella Weinberg Partners LP and Deutsche Bank AG served as financial advisors to Deutsche Börse. Hengeler Mueller and Cravath, Swaine & Moore LLP served as legal counsel to Deutsche Börse.

Centerview Partners LLC and Sullivan & Cromwell LLP served as financial advisor and legal counsel to Axioma. Milbank served as legal counsel to General Atlantic.