Financial Data Firm Targets £4bn Float

Mark Kleinman, City Editor
Financial Data Firm Targets £4bn Float

A financial data provider that is among the fastest-growing companies in Britain has begun sounding out advisers about a stock market listing that would value it at more than £4bn.

I have learnt that Markit Group, which was founded in a garden barn not much more than a decade ago, is canvassing banks, public relations firms and legal advisers about the move.

If it decides to press the button on a flotation, Markit would be one of the biggest financial companies to go public for many years.

Markit has not yet made a firm decision to pursue a listing, and a flotation would in any event be unlikely to take place before next year at the earliest, according to insiders. It is also far from certain that a flotation would take place in London, with New York the likeliest listing venue for the company.

Other options include an outright sale to a trade buyer or group of private equity investors.

"There are still lots of things to be decided but the discussions are focused on eventual achieving a public listing for the company," one person involved in the talks said.

Markit, which provides information across financial asset classes such as credit default swaps, was founded by Lance Uggla, a Canadian former bond trader, in a barn at the bottom of his garden not much more than a decade ago.

It is now regarded as a key component in the financial infrastructure relied upon by investment banks and traders around the world. It now employs more than 2,500 people and has offices around the world.

Mr Uggla has described his vision for Markit as "the iTunes of the financial world".

His company is majority-owned by large Wall Street and European investment banks, such as Bank of America Merrill Lynch, Goldman Sachs and JP Morgan. Each of their stakes would be worth tens - if not hundreds - of millions of dollars as part of a flotation.

Insiders said that those, and other, banks were being lined up to pitch for a role on a possible listing.

The private equity firm General Atlantic paid a reported £155m for a 7.5pc stake in Markit in 2010. The most recent valuation exercise had put a price-tag on Markit of approximately $6bn, since when profits had continued to rise, insiders said.

Sky News revealed last month that Markit was in talks to sell a stake in itself to Temasek Holdings, the Singaporean state-backed investment company. Those discussions are understood to be continuing and were likely to be concluded before a formal decision about a flotation had been taken.

A decision to list in New York would be a blow to London, which has seen the beginnings of a resurgence in the market for initial public offerings. Companies such as Crest Nicholson, the housebuilder, and esure, the motor insurer, have announced plans to float in London.

One of Mr Uggla's few setbacks since founding Markit in 2001 came exactly a decade later, when the company lost out in a bidding war for control of LCH.Clearnet, the clearing house, which is now in the process of being bought by the London Stock Exchange.

Markit has also been the subject of a long-running investigation by Brussels into the pricing of credit information.

A Markit spokesman declined to comment.