S&P exits data business with sale of ComStock to Interactive Data

Interactive Data Corp, a unit of UK media company Pearson, has agreed to buy Standard & Poor’s (S&P) ComStock for $115 million in cash, adding real-time market data to its stable of products.

S&P ComStock has been rumoured to be up for sale for months, with suitors said to include Moneyline Telerate and Telekurs. Among other attractions, it has a large institutional customer base – many of which use it for a backup feed – and its own ticker plant for collecting and distributing real-time data from more than 180 stock exchanges and other sources globally.

The sale allows S&P to focus on research and evaluation services. Rik Kranenburg, executive vice-president of S&P Investment Services, said, "We were not committed to continuing to own market data or to be in the market data business." The sales of DRI, JJ Kenny and MMS were also part of this strategy.

An industry source said S&P ComStock did well during the dotcom boom providing cheap data, but has since lost business, particularly from failed dotcoms and particularly in Europe.

But the business presents Interactive Data with a quick way to build an institutional datafeed business. "It’s really brought into our company a capability that otherwise would have taken us several years to develop," said Stuart Clark, Interactive Data’s president and chief executive. The deal could also lead to new products, such as snapshot and real-time services, for end-of-day customers, he said.

Clark confirmed ComStock’s growth declined in 2002, but said he was confident that the business has a stable revenue stream. It had $66 million in revenues in 2001 and $63 million in 2000, according to IMDReference, a quarterly product examining developments in the data industry published by RiskNews' publisher Risk Waters Group.

As part of the sale, S&P and Interactive Data signed a two-year contract in which S&P will continue to carry ComStock data and ComStock will continue to distribute S&P content.

Clark said there would not be any immediate product cancellations, but he does expect to gradually eliminate duplicate infrastructure and data. He also plans to integrate corporate actions data and other securities information from subsidiary FT Interactive Data into ComStock products.

He added that he was open to partnering with other companies for use of ComStock’s ticker plant. Moneyline Telerate, for one, is thought to be interested in such a deal.

A full version of this story is available at www.insidemarketdata.com.