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FactSet Acquires Financial Analytics Firm BISAM for $205.2M

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In a move to enhance its risk analytics and client reporting capabilities, FactSet Research Systems Inc. (FDS - Free Report) recently announced that it has acquired BISAM Technologies S.A. The leading provider of online integrated data-related products and services for the investment community acquired BISAM from Aquiline Capital Partners and company insiders for $205.2 million.

Per FactSet, “BISAM is a leading provider of portfolio performance and attribution, multi-asset risk, GIPS composites management and reporting.” The company has over 160 employees worldwide. BISAM’s software help asset managers in evaluating and enhancing their investment strategies, thereby better serving clients.

FactSet believes that BISAM’s B-One solution will enhance its analytics suite and client reporting capabilities. Its product – Cognity – is anticipated to boost FactSet’s risk analysis for derivatives and quantitative portfolio construction.

In 2016, BISAM generated total revenue of over $28 million. FactSet anticipates this acquisition to be accretive by 6 cents and 2 cents to its fiscal 2017 GAAP and non-GAAP earnings, respectively.

To fund the acquisition, FactSet entered into a Credit Agreement with PNC Bank, National Association, under which it has borrowed $575 million. The loan bears an interest rate of LIBOR plus 1% and will mature on Mar 17, 2020.

The leftover amount, after payment for the acquisition, has been used toward repaying the previous loan of $365 million borrowed from Bank of America (BAC - Free Report) .

FactSet is one of the leading providers of online integrated data-related products and services for the investment community. Notably, the stock has been clocking solid returns over the last one year and has gained approximately 20.7%, outperforming the Zacks categorized Business Information Services industry's return of 5.9%.

Over the years, FactSet has made several acquisitions to expedite growth. The company’s most notable acquisitions include the buyout of Portware LLC, Code Red, Revere Data LLC, StreetAccount, etc. These acquisitions are aimed at aiding FactSet deliver innovative products and evolve as a global financial database company. The buyouts will also help the company to maximize value for its partners and provide customers with exclusive content sets.

Going ahead, according to ReportsnReports, the Global Business Information market is anticipated to grow at a CAGR of 5.15% from 2014 to 2019. FactSet, being one of the key data providers, is expected to gain a competitive edge through its technological know-how and increasing share in new markets.

FactSet’s consistent focus on product innovation across segments, with an emphasis on financial services to expand its customer base, has helped the company stay afloat amid the current macroeconomic challenges.

Currently, FactSet carries a Zacks Rank #2 (Buy).

Other stocks worth considering in the broader technology sector are Seagate (STX - Free Report) and Western Digital Corporation (WDC - Free Report) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Seagate and Western Digital have a long-term expected earnings growth rate of 8.2% and 12.1%, respectively.

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