RiskMetrics (RMG) Under The Hammer, Interactive (IDC) May Follow Suit

The Wall Street Journal reports that New York-based RiskMetrics (NYSE: RMG) has put itself up for sale. The company may fetch up to $1.3 billion, which includes a premium of 30% of its value based on last Friday’s trading. At present, a completed deal is still uncertain for the 1,100 employee-strong company.

There is also the possibility that potential buyers may not offer enough to persuade RiskMetrics to sell. MSCI, which is a former Morgan Stanley (NYSE: MS) unit, Thomson Reuters (NYSE: TRI), Bloomberg, and McGraw-Hill (NYSE: MHP) are likely buyers in the deal, which will be handled by Evercore Partners (NYSE: EVR).

RiskMetrics’ suitors will also be considering bidding for Interactive Data Corp. (NYSE: IDC), which is partly owned by Pearson PLC (NYSE: PSO). IDC would be the bigger deal of the two, with a valuation of $2.8 billion. Both RiskMetrics and IDC are stable subscription-based businesses, which makes them appealing to private equity firms like Kohlberg Kravis Roberts & Co and the Carlyle Group.

In the case of RiskMetrics, as much as 92% of its revenue, estimated at $300 million in 2009, is of a recurring nature. Currently, private equity holdings account for 46% of the company’s shares.

RiskMetrics was formed in 1994 as a portfolio-risk analysis unit within JPMorgan Chase (NYSE: JPM). It was split off four years later, and has grown since then via the acquisition route. The company went public in 2008. RiskMetrics' shares traded at $17.07 on Friday.