Dow Jones Sells Online Financial Solutions To IDC
Dow Jones & Company has agreed to sell its Online Financial Solutions business to Interactive Data Corporation, the companies said Tuesday. Expected to be completed within the next several weeks, terms of the deal were not disclosed.
The OFS data and tools -- part of MarketWatch Licensing Services before Dow Jones acquired MarketWatch in 2005 -- are used to develop and host Web-based solutions including news, market data, research and financial charting, along with portfolio management and alerting capabilities for some 200 financial institutions, investor services, and media Web portals.
The OFS assets are just the latest in a string of divestitures for Dow Jones & Co., whose parent company News Corp. has not been immune to the economic downturn. It just sold its one-third interest in European stock-indexing business Stoxx for $300 million, and recently sold its online news syndication services unit Screaming Media to content management company YellowBrix for an undisclosed sum.
Dow Jones plans to hold onto its news business and enter into a non-exclusive redistribution agreement with Interactive Data to sell MarketWatch news to new and existing customers in the OFS market. Interactive Data, meanwhile, plans to integrate the OFS assets into its U.S. Managed Solutions group, which is part of Interactive Data Real-Time Services. It said it expects to retain a number of employees currently affiliated with the OFS business, which has operations in Minneapolis, New York City and San Francisco.
As part of the plans to migrate OFS customers into Interactive Data's technical infrastructure, Interactive Data and Dow Jones have entered into a transition services agreement for hosting and other related services for up to two years.
Acquiring OFS assets is part of Interactive Data's broader efforts to expand its Web-based solutions business in North America, according to Ray D'Arcy, Interactive Data's president and chief executive officer.
"We believe that acquiring these OFS assets will further accelerate the progress we've made over the past several years to rapidly grow our Web-based solutions business in North America," said D'Arcy. This acquisition is also expected to create opportunities for Interactive Data to expand OFS's existing relationships with U.S.-based financial institutions by offering them its Web-based offerings, real-time market data services and other desktop solutions. "We see attractive opportunities for us to further expand OFS's business with its institutional customers by offering them a much broader range of services and solutions," D'Arcy added.
Interactive Data anticipates that the transaction will be cash-flow positive and earnings-neutral in 2009 and 2010, and "through a combination of planned revenue growth and operational synergies," accretive to earnings by 2011.
Headquartered in Bedford, Mass., Interactive Data has about 2,400 employees in offices located throughout North America, Europe, Asia and Australia. International media company Pearson, whose businesses include the Financial Times Group, Pearson Education, and the Penguin Group, is Interactive Data Corporation's majority stockholder.