Moody’s (MCO) to Acquire Fermat International for $189 Million Plus Considerations; Sees Deal Dilutive Through 2009

September 15, 2008 8:22 AM EDT
Moody’s Corporation (NYSE: MCO) has agreed to acquire Fermat International, a provider of risk and performance management software to the global banking sector. Moody’s will purchase Fermat for €132.5 million ($189 million), subject to customary closing adjustments. An additional sum of up to €25 million ($36 million) in consideration may be paid based on achievement of certain financial targets by year-end 2008.

Moody’s anticipates that this acquisition will add incremental annual revenues of approximately $75 million to $85 million by 2010, with lower incremental 2009 revenues reflecting most of the impact from purchase accounting and deferrals associated with conversion to U.S. GAAP. Future revenue growth will be achieved through license sales and fees from software maintenance and related professional services. The acquisition is expected to be $0.05 to $0.07 dilutive to earnings per share (EPS) in the fourth quarter of 2008, dependent on purchase accounting adjustments and the actual closing date. This transaction is expected to be accretive to EPS by the fourth quarter of 2009 and thereafter; the impact on full-year 2009 EPS is expected to be modestly dilutive.

The acquisition is expected to be completed in approximately 30 to 45 days, subject to regulatory review and customary closing conditions. Moody’s Corporation was advised by Greenhill & Co. on this transaction. Fermat International was advised by Jefferies International Limited.

Moody's Corporation (Moody's) is a provider of credit ratings, research and analysis covering fixed income securities, other debt instruments and the entities that issue such instruments in the global capital markets, and credit training services, and quantitative credit risk assessment products and services.[SM]

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