Morningstar is buying Ibbotson Associates for $83 million in cash. Morningstar expects to get $10 million in cash tax benefits as a result of the cancellation of Ibbotson stock options, so in reality, the fund tracker is buying Ibbotson for $73 million.
"Ibbotson's expertise in asset allocation and Morningstar's expertise in security selection and investment research is a powerful combination," said Joe Mansueto, chairman and CEO of Morningstar, in a statement. "Our companies share many similarities, and we have a firm commitment to helping investors reach their financial goals. I have long admired Ibbotson's work, and this acquisition is a logical move that will further strengthen Morningstar's institutional and adviser business."
Ibbotson is a good fit with Morningstar's culture, agreed Roger Ibbotson. "Our missions are very similar; we are both focused on solving investor problems. Joe and I both started our companies as bootstrap ventures, and we run our businesses with an entrepreneurial spirit. We have worked with each other for many years, and I can't think of a better partner for our business."
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