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Moody's To Acquire Regulatory DataCorp For $700 Mln - Quick Facts

Moody's Corp. (MCO) said it has agreed to acquire Regulatory DataCorp or RDC, a provider of anti-money laundering and know-your-customer data and due diligence services, for $700 million.

RDC is currently owned by Vista Equity Partners, an investment firm focused on enterprise software, data and technology-enabled businesses. Located in the greater Philadelphia area, RDC has been a part of the Vista portfolio since September 2016.

Moody's noted that the acquisition of RDC complements its acquisition in 2017 of company data provider Bureau van Dijk or BvD.

The deal will deepen BvD's information portfolio and analytical capabilities by adding RDC's risk-relevant dataset and technology, including the first-to-market true artificial intelligence or AI screening solution.

It will also extend RDC's presence to a broader group of financial institutions, corporations, insurance companies and government agencies served by Moody's Analytics and BvD.

Moody's noted that RDC's proprietary Global Regulatory Information Database or GRID helps companies assess counter-parties through more than 60 risk types by examining over 120,000 global sources. These include adverse media coverage, politically exposed persons, government sanctions and regulatory watchlists.

RDC's platform incorporates artificial intelligence or AI for compliance screening to help process customer requests at greater speeds and accuracy while reducing false positives.

Moody's said it expects the transaction to close in the first quarter of 2020. The company will fund the transaction with a combination of cash on hand, commercial paper and debt financing.

Moody's expects the acquisition of RDC to generate annualized revenue of about $55 million in 2020, and to be accretive to its earnings per share on an adjusted basis in 2022.

Due to the estimated impact of amortization expense relating to acquired intangible assets, the company expects the transaction to be accretive to earnings per share on a reported basis in 2024.

Including the impact of this transaction, Moody's anticipates its share repurchases for 2020 to total about $1.3 billion, subject to available cash, market conditions and other ongoing capital allocation decisions. The company's share repurchases during 2019 totaled about $1.0 billion.

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