Technology
giant IBM announced a definitive agreement to acquire Algorithmics for $387
million, subject to price adjustments at closing. Algorithmics is a risk
analytics firm with operations in Toronto. The company’s risk analytics
software, content and advisory services are used by banking, investment and
insurance businesses to help assess risk, address regulatory requirements and
make more insightful business decisions.
Algorithmics
is a member of Fitch Group, which is majority owned by Fimalac, a holding
company based in Paris.
The
acquisition expands IBM's business analytics capabilities in the financial
services industry by helping clients quantify, manage and optimize their risk
exposure across a range of financial risk domains, including market, liquidity,
credit, operational and insurance, as well as economic and regulatory capital.
More than 350 clients, including 25 of the top 30 banks and more than
two-thirds of the CRO Forum of leading insurers, use Algorithmics analytics
software and advisory services. Clients include The Allianz Group, BlueCrest,
HSBC, Nedbank, Nomura, Societe Generale and Scotia Capital.
“Today's
economic environment demands that financial institutions have more cash on
hand, a better understanding of their financial standing and the ability to
deliver more transparency to stakeholders,” said Rob Ashe, IBM general manager
of business analytics. “Combining Algorithmics' expertise with IBM’s deep
analytics portfolio will allow clients to take a more holistic approach to managing
risk and responding to economic change across their enterprises.”
According
to a recent IBM Institute of Business Value survey of 1,900 global CFOs, nearly
half indicated that their finance organizations are not effective in the areas
of strategy, information integration, risk and opportunity management. The
survey results suggested that the importance of integrating information has
more than doubled, mirroring the exponential rise in information volume and
velocity within businesses today.
“It
is increasingly important to deliver integrated solutions that provide a deep
understanding of risk and enable effective decision support at the same time as
meeting rapidly evolving regulatory requirements. The need to have the right
information at the right time is fundamental to developing and managing
business strategies,” said Dr. Michael Zerbs, president and COO of
Algorithmics. “Combining Algorithmics' thought leadership, technology, content
and services with IBM's globally recognized analytics business will help a
broader group of clients improve their business performance based on a deeper
understanding of risk.”
