Moody’s to acquire King of Prussia-based RDC for $700 million

Tom Paine

Regulatory Data Services (King of Prussia) announced today it was being acquired by Moody’s.

The price was $700 million, and Moody’s expects 2020 revenue to be $55 million. That’s a good price/sales ratio 0f 13:1, a bit higher than I would expect it to be. It indicates that better than average growth is expected.

RDC collects information from many different sources on both famous and infamous individuals and the organizations they are associated with. The key is to help financial institutions meet regulatory requirements for KYC (“know your customer”) and anti-money laundering. The terror threat and the financial crisis of the early 2000s resulted in much more onerous potential penalties for these events.

RDC was established in 2002 by a consortium of 20 of the world’s largest financial institutions. Vista Equity Partners, one of the largest tech PE firms, acquired RDC from Bain Capital Ventures in 2016 and was the seller today.

“RDC’s proprietary Global Regulatory Information Database (GRID) helps companies assess counterparties through a lens of more than 60 risk types by examining over 120,000 global sources, including adverse media coverage, politically exposed persons, government sanctions and regulatory watchlists. RDC’s platform incorporates industry-leading artificial intelligence (AI) for compliance screening to help process customer requests at greater speeds and accuracy while reducing false positives.”, Moody’s press release stated.

At Moody’s, RDC will be folded in with Bureau van Dijk, a 2017 acquisition that offers a similar product.

I knew Moody’s had great margins, but its current market value of $48.5 billion was a complete surprise to me.

Moody’s Analytics still has scores of people in West Chester, but its not clear if RDC will have anything to do with that business.

Tom Walsh is RDC’s CEO, and there is no mention in the press release of any forthcoming management changes. RDC has 544 employees according to LinkedIn.

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