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biz.yahoo.com
HyperFeed Enters into an Agreement To Sell Its Consolidated Market Data Feed Client Base for $8.5 Million
Tuesday October 28, 7:15 pm ET
CHICAGO--(BUSINESS WIRE)--Oct. 28, 2003-- HyperFeed to Sell its Consolidated Data Feed Business to Interactive Data Corporation (IDC), License its Ticker Plant Technology to IDC and Enter into a Transition Services and Data Center Outsourcing Agreement with IDC
HyperFeed Technologies, Inc. (NASDAQ:HYPR - News), a provider of Managed Exchange Platform Services (MEPS) and H!BOX software and ticker plant technologies announces that it has entered into an agreement to sell its consolidated data feed customer base to Interactive Data Corporation (NYSE:IDC - News) for $8.5 million. HyperFeed is selling its rights under its consolidated data feed service contracts, in exchange for cash of $8.5 million. The purchase price will be paid in several installments after an initial payment of $6.25 million at closing and is subject to certain adjustments and the achievement of certain milestones. We believe that the completion of this transaction will result in a gain of approximately $5.6 million and a corresponding increase of stockholders equity in the period the transaction is closed, with an additional $2.2 million gain to be realized as milestones are met. The milestone payments include $750,000 to be paid upon renewal of a contract, $625,000 for the completion of custom software and the fulfillment of a transition services agreement, and $875,000 for an indemnification holdback, that is scheduled to be released in payments based on milestone achievements over the next 24 months.
In addition to the gain from the sale of our customers' contracts, we have also entered into a licensing agreement that allows IDC to continue utilizing our customer premise technologies for a period of five years and a transition services agreement for operating our current consolidated ticker plant for a period of one year. The entire transaction is expected to close on October 31, 2003 and is subject to customary closing conditions.
Paul Pluschkell, HyperFeed's President comments, "Evolving our business model from consolidated market data vendor to a utility provider of technology, software and services for financial institutions has been our strategy for the last 12 months, as evidenced by the divestiture of our PCQuote.com internet subsidiary and now our consolidated market data business. Recent technology licensing sales to CBOE, Moneyline Telerate and now Comstock illustrates the market data industry's demand for managed ticker plant technologies and services for processing, transmitting and distributing financial information while allowing customers greater control over data sources, data performance and data costs. As a result of this transaction, we are now better capitalized and a market leader in a higher margin technology services business. In addition, by exiting the consolidated data feed business, we currently expect to be able to reduce our overhead by more than $8 million annually. This overhead reduction is comprised primarily of communications, data access and labor costs."
IDC is a leading global provider of essential financial data and analytics to institutional and individual investors. ComStock, IDC's global real time market data division, provides financial data and information from more than 180 stock exchanges worldwide.
"We are pleased to have this opportunity to expand our global real time information business by servicing these clients with real time content and applications from ComStock," said Stuart Clark, president and chief executive officer of Interactive Data Corporation. "In addition to receiving our global real time market data feed, these clients will also have access to a host of other services from Interactive Data Corporation, such as corporate actions, end-of-day, descriptive and historical data representing Interactive Data's 35 years of experience in the financial information business."
Pluschkell continues, "In choosing a buyer for our consolidated market data business we looked for an experienced, dedicated company with whom we could place our customers, and IDC and its ComStock division proved to be a very well suited match. This agreement allows us to be a preferred reseller of Comstock for our technology customers looking to package real time consolidated market data with HyperFeed technology solutions. A final component of the agreement calls for IDC to license HyperFeed's technologies in order to transition and then provide ongoing services to the purchased contracts."
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