Index developer MSCI Inc. reported today that its subsidiary, MSCI Limited, has entered into a definitive agreement to acquire IPD Group Limited, a holding company for the IPD Group, for a purchase price of approximately $125 million, funded through existing cash.

IPD provides real estate investment performance benchmarking, performance analysis, market indices, risk management tools and market research to the owners, institutional investors, managers, lenders on, and occupiers of, real estate. The acquisition is subject to customary closing conditions for transactions of this nature.

"The acquisition of IPD is part of our core strategy to provide investment decision support tools to institutional investors across all major asset classes. IPD’s real estate industry knowledge and strong capabilities complement MSCI’s expertise in providing investment tools for the equities, fixed income, hedge fund, energy and commodities markets," said Henry Fernandez, Chairman and CEO, MSCI Inc., in a statement.

MSCI recently suffered a blow when Vanguard announced that it was pulling a half trillion of mandates from the indexer, shifting the indices of 22 ETFs to FTSE and the University of Chicago’s CRSP.

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Company Press Release

MSCI to Acquire the IPD Group

Combination of MSCI and IPD Brings Real Estate to the Fore as a Global Asset Class

London – October 31, 2012 – MSCI Inc. (NYSE: MSCI), a leading provider of investment decision support tools worldwide, announced today that its subsidiary, MSCI Limited, has entered into a definitive agreement to acquire IPD Group Limited, a holding company for the IPD Group, for a purchase price of approximately $125 million1 (£78 million), funded through existing cash. IPD is a leading provider of real estate investment performance benchmarking, performance analysis, market indices, risk management tools and market research to the owners, institutional investors, managers, lenders on, and occupiers of, real estate. The acquisition is subject to customary closing conditions for transactions of this nature.

"The acquisition of IPD is part of our core strategy to provide investment decision support tools to institutional investors across all major asset classes. IPD’s real estate industry knowledge and strong capabilities complement MSCI’s expertise in providing investment tools for the equities, fixed income, hedge fund, energy and commodities markets," said Henry Fernandez, Chairman and CEO, MSCI Inc.

"This is an exciting addition to our business. We’ve seen significant demand from institutional investors globally for better coverage of private markets. The real estate investment market presents considerable opportunities for growth, and we look forward to helping to accelerate the institutionalization and globalization of real estate as an asset class.”

“We believe this transaction is key to the long-term success of IPD, and it has the wholehearted support of our shareholders and staff,” said Rupert Nabarro, Chairman of IPD. “Our aim has always been to make IPD a truly global provider of real estate data and analytics, providing trusted benchmarks for the industry and developing real estate as a global asset class. MSCI’s acquisition of IPD will help us reach these goals, while maintaining our real estate expertise and the well established IPD brand.”

MSCI expects its global footprint, strong relationships with institutional investors, technological and operational expertise to enhance IPD’s existing products and services. The addition of IPD will enable MSCI to expand its multi-asset class offering by integrating private real estate assets into its models, and by adding real estate benchmarks to its family of market leading indices.

For the year ended December 31, 2011 and the six month period ended June 30, 2012, IPD had U.S. dollar equivalent revenues of $47.7 million2 (£29.7 million) and $26.4 million2 (£16.7 million), respectively. The acquisition is not expected to have a material impact on MSCI’s results of operations in fiscal year 2012. The transaction is expected to close during the fourth quarter of 2012.

Davis Polk & Wardell LLP and Allen & Overy LLP acted as legal advisers to MSCI. Lazard & Co., Limited was lead adviser to IPD Group Limited, supported by Tom Van Oss and Portico Capital, and Linklaters acted as legal advisers, supported by Addis Law.  

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