Markit Seeks to Raise $1.14 Billion in U.S. Initial Offering

Markit Ltd., the financial information company whose price data forms the basis for much of the global derivatives and bond markets, is seeking to raise as much as $1.14 billion in its U.S. initial public offering.

The company’s stockholders are selling 45.7 million shares for $23 to $25 apiece, according to a regulatory filing yesterday. Markit, whose clients include banks, hedge funds, accounting firms, exchanges and central banks, will not receive any proceeds from the IPO. The company’s equity value would be about $4.5 billion at the high end of the range, based on 178.9 million shares to be outstanding, the filing shows.

The IPO comes as industry revenue from fixed-income trading slumps. The five largest Wall Street banks posted $51 billion of revenue from that business in 2013, down 38 percent from 2009, according to data from Bloomberg Industries. London-based Markit was valued at about $5 billion in 2013, a person with knowledge of the matter said last year.

Markit derives half of its revenue from selling financial data such as prices and indexes, with the rest split between processing trades for over-the-counter derivatives, currencies and loans, and the sale of enterprise software platforms. The company posted an operating profit of $230 million, on revenue of $948 million last year, according to the filing.

Markit, led by Chief Executive Officer Lance Uggla, competes with Bloomberg News parent Bloomberg LP in selling information and communications to the financial industry.

Managing Information

Authorities have been examining whether banks controlling the firm colluded to withhold information that would block the development of exchange trading, a shift that could have crimped their profits from handling client transactions.

Twelve out of Markit’s 15 underwriters -- including Bank of America Corp., Deutsche Bank AG, Goldman Sachs Group Inc. and JPMorgan Chase & Co., which each own at least 5 percent -- are also selling shares in the offering.

Markit plans to list its shares on the Nasdaq Stock Market under the symbol MRKT.

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