Army major cashes in on Mergermarket sale

Click to follow
The Independent Online

A former Army officer and a journalist are to pocket £10m each after selling the business they founded, Mergermarket, to Pearson, the owner of the Financial Times, for £101m.

Mergermarket provides information on forthcoming mergers and acquisitions to investment bankers and others in the M&A community.

Caspar Hobbs, 37, started the venture in December 1999, a little more than a year after leaving the Scots Guards, where he had become a major during his 10-year career. On quitting the army, he worked on the commercial side at Financial News, the weekly publication for the City, where he met Charlie Welsh, 40, a journalist. They came up with the concept for Mergermarket, which uses some of the strategy Mr Hobbs had employed inthe Army.

"The idea is really simple. There is a lot of [M&A] information out there but very little intelligence," Mr Hobbs said. "We focus on primary-source intelligence about the future intentions of companies. We take earlier-stage information and process it into a form that people can use to make money."

He said that as in the army, information is collected from sources such as patrols, reports from people on the ground and cameras. It is then collated and analysed.

Mergermarket uses 160 full- and part-time journalists to collect the information, which is collated and analysed by editors to see what would be useful to M&A professionals looking for the heads-up on possible future deals - "early-stage intelligence that is actionable".

The company has about 1,000 subscribers and the information is delivered through a website, mostly through a searchable database. It is thought Mergermarket's revenues were £18m in 2005.

Mr Hobbs and Mr Welsh, the editor-in-chief, who will both remain with the business, each hold a stake of some 10 per cent. Gawn Rowan Hamilton, a former Schroders banker who joined the business early on as finance director, has about 5 per cent.

NewMedia Spark, the private-equity house that first backed the company, has made a return of 24 times its initial investment through the sale to Pearson.

Rona Fairhead, the chief executive of the Financial Times Group, said: "For the FT Group, it adds proprietary content, a premium customer base, reliable growth from new revenue sources and attractive financial characteristics. "