Markit, the financial data giant created in a converted barn in Hertfordshire 12 years ago, has gone public on the Nasdaq stock market, making a multi-millionaire of its founder and turning dozens of its top staff into millionaires.
Markit priced its shares at $24 and increased the number being sold by 17 per cent to satisfy high demand. At the offer price Markit, which is headquartered in the City of London, is valued at $4.28bn. The shares rose roughly 11 per cent on their market debut in New York.
Lance Uggla, 52, Markit’s chairman and chief executive, is worth about £450m following the float. Mr Uggla is a Canadian who ran the London operations of the broker TD before founding Markit. Asked if he would stick around after the float, he said: “I did not sell anything in the IPO - I really do feel this is th enext step. I hope I’m here to lead the company for many more years to come.”
A further 60 executives and senior managers, many of whom sold their young data businesses to Markit, each have stakes worth at least $1m. Many are London and Home Counties entrepreneurs.
Markit, best known for its monthly purchasing managers’ indices which signal growth in the manufacturing, construction and services sectors ahead of official data, has turned into a significant rival to the older financial data companies Thomson Reuters and Bloomberg.
While Thomson Reuters is valued at more than $29bn and Bloomberg founder Michael Bloomberg is rated the 16th richest man in the world at $34 bn, Markit hopes its share float will give it the fire power to outgrow its rivals. It raised no new cash through the offer.
Markit is also keen to exploit the questions which have been raised over the use of rivals’ messaging systems in the benchmark rigging scandals around Libor and foreign exchange trading.
The other big winners from the flotation are the investment banks who are big backers of Markit and owned sizeable stakes in the business. Between them the banks sold around 35 million shares of the total 53 million shares in the offer which saw them collect more than $840 m.
No fewer than 10 of the investor banks also acted as advisers on the flotation. They were BoA Merrill Lynch, Barclays, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JP Morgan, Morgan Stanley and UBS. They have the option to add a further 8 million shares to the offer if trading goes well.
The Singapore state investor Temasek Holdings has a stake of more than 10 per cent in Markit through its subsidiary, Esta Investments.
Markit’s customers include banks, hedge funds, asset managers, central banks, regulators, auditors, fund administrators and insurance companies.
Founded in 2003, Markit employs more than 3,000 people in 10 countries.
Markit reported revenue of $947.9m for 2013, up 10 per cent. Its profit attributable to equity holders fell about 21.5 per cent to $39.8m for the three months ended 31 March, while revenue rose about 14 per cent to $259.4m.that Dubai’s Emirates airline had cancelled an order for 70 A350 aircraft. The planes would have been powered by Rolls engines and the order book was hit by £2.6bn.
At the event for investors, Mr Rishton also updated them over the way Rolls accounts for the sale of equipment and services in a division known as TotalCare. The accounting regulator demanded a reassessment of its 2013 figures, which saw nearly £40m wiped off last year’s profit.
Analysts were in agreement that the buyback was the best news in some time from Rolls. Espirito Santo said it showed management was “committing itself to very tight capital discipline”, while Ben Bourne at the broker Liberum pointed out that there had “been plenty of food for the bears recently” so the reiteration of guidance would be “well received”. He added: “No material acquisitions are planned, which is a relief as many investors were concerned they would make another play for Wartsila post July, requiring more equity.”
Sash Tusa, analyst at Edison Investment Research, said: “We are pleased that the company is responding to the market by returning circa £1bn to shareholders.”
Rolls powers over 30 types of aircraft and is the world’s second-biggest manufacturer of military aero-engines, and it is also developing its nuclear business. Earlier this week it signed a memorandum of understanding with CGN, a Chinese nuclear group, to provide engineering support.