Morningstar Inc. will buy credit-ratings firm Realpoint LLC, for $52 million.
The price for the deal, which is expected to close in the next few months, includes a $42 million cash payment and $10 million in restricted Morningstar stock, according to a Morningstar news release.
In the news release, Joe Mansueto, Morningstar's chairman and CEO, said Morningstar — which in December announced its entry into corporate credit ratings — and Realpoint are dedicated to working together “to restore credibility to the credit ratings business and be a positive force in rating structured products.”
In an interview, Robert Dobilas, Realpoint's president and CEO, said unlike major ratings agencies, which get the bulk of their income from rating new issues for issuers, Realpoint draws subscription-based revenue from investors who rely on the company's monthly surveillance of almost the entire universe of commercial mortgage-backed securities. In the same interview, Catherine Odelbo, Morningstar's president of equity research, said her company sees a lot of business opportunities in offering investors better, more transparent research on structured credit.
Realpoint is one of only 10 ratings agencies worldwide with the SEC's “nationally recognized statistical ratings organization” designation.