Target: DBRS Ltd
Price: several hundred million dollars
Seller: Walter Schroeder
Financial Adviser: Perella Weinberg Partners LP
DBRS owner Walter Schroeder, who founded the firm in 1976 and is now in his 70s, has hired investment bank Perella Weinberg Partners LP to run an auction for the firm, the people told sister news service Reuters. Private equity firms are among the parties interested, the people added.
They said DBRS could fetch several hundred million dollars in a sale. The sale process is part of a wider exploration of strategic alternatives driven by Schroeder’s estate planning, one of the people added. The sources cautioned that a deal is not certain and asked not to be identified because the sale process is confidential. A DBRS spokesman declined to comment, while a Perella Weinberg spokeswoman did not respond to a request for comment.
Toronto-based DBRS is the world’s fourth-largest credit rating agency. It rates the debt of companies, local authorities and countries, as well as structured finance products such as commercial mortgage-backed securities. DBRS got a modest start 30 years ago in Toronto, when Schroeder left a Bay Street investment dealer to start rating short-term commercial paper. Two years later, the firm began covering corporate and sovereign debt.
While Standard & Poor’s, Moody’s and Fitch still account collectively for more than 95 percent of the ratings market, DBRS, with a 2 percent market share, has focused on structured finance products, countries and financial institutions, though it rates all asset classes. Daniel Curry, a former Moody’s managing director, currently serves as chief executive of DBRS.
In a Reuters interview in 2007, Schroeder said he had regularly received overtures to acquire the company but was not interested at that stage. “For the time being, we’re fine with the way we are. It would probably take quite an overwhelming offer of some sort to get me to change my mind,” Schroeder said at the time.
Greg Roumeliotis is a correspondent for Reuters in New York.