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Financial information provider Markit's shares jump in debut

Markit webpage
Source: Markit
Markit webpage

Shares of Markit rose as much as 12.5 percent in their market debut, valuing the financial data provider at $4.83 billion and raising about $1 billion for its 12 bank shareholders.

Highlighting strong demand for the shares, the size of the offering was increased by 17 percent to 53.5 million shares. The offering was priced at $24 per share, the mid-point of the expected price range, raising $1.28 billion.

All shares were offered by selling shareholders, which include Wall Street's biggest banks such as Bank of America, Goldman Sachs Group and JPMorgan.

After the offering, the combined stake owned by the banks fell to 32.7 percent from 53.2 percent. The banks are expected to have raised as much as $1 billion from the offering.

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The company's biggest shareholders—Employee Benefit trust, private-equity firm General Atlantic and Singapore state investor Temasek Holdings—held on to their stakes.

Markit appointed Jefferies as an independent underwriter, citing conflict of interest as its lead underwriters are also its selling shareholders. Jefferies holds no shares in the company.

The company also appointed Rothschild as an additional adviser though the firm had no underwriting duties in the offering.

Markit's shares opened at $26.15 on the Nasdaq on Thursday and touched a high of $26.99.

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Founded by Canadian Lance Uggla in 2001, London-based Markit has more than 3,000 institutional customers globally, including banks, hedge funds and asset managers.

The company, which provides pricing and reference data, indexes and valuation services, competes with Thomson Reuters and Bloomberg among others.

Markit posted a profit of $147 million on revenue of $947.9 million in 2013.

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Markit said United States accounts for nearly half of its total revenue, while the European Union is its second biggest market, contributing about 40 percent.

Canada Pension Plan Investment Board said it would invest $450 million in the company through a private placement at the IPO price, giving it a 10 percent stake in the company. It will also nominate a director to Markit's board.

BofA Merrill Lynch, Barclays, Citigroup and Credit Suisse were among the 10 lead underwriters for the offering.

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—By Reuters