S&P Global acquires AI startup Kensho in $550 million deal
S&P Global has announced its intention to acquire Kensho in a deal worth $550 million.
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On Wednesday, New York-based S&P said that the deal would bolster the firm's portfolio of next-generation technologies.
The acquisition agreement has been signed for $550 million in cash and stock.
Cambridge, Mass.,-based startup Kensho Technologies is a developer of analytics software, machine learning, and artificial intelligence (AI) solutions, and data visualization systems tailored for banks and investment institutions worldwide.
Kensho's goal as a company is to "deploy scalable machine learning and analytics systems across the most critical government and commercial institutions in the world to solve some of the hardest analytical problems of our time."
Founded in 2013, the startup, which has no more than 100 employees, has raised a total of $67.5 million in funding. The latest Series B funding round, of which $9 million was raised, was led by S&P.
Goldman Sachs, Citigroup, and Morgan Stanley, among others, were investors alongside S&P -- which has now decided to purchase the company outright.
S&P says the acquisition will "enhance its ability to deliver essential, actionable insights that will transform the user experience for its clients, and accelerate efforts to improve efficiency and effectiveness of its core internal operations."
However, Kensho will continue to operate as a separate brand in Cambridge.
"We are thrilled that Kensho will become part of S&P Global as its new class of analytical tools will help us accelerate transformation across our entire company," says Douglas Peterson, S&P Global President, and CEO. "In just a short amount of time, Kensho's intuitive platforms, sophisticated algorithms, and machine learning capabilities have established a wide following throughout Wall Street and the technology world."
"Via this acquisition, S&P Global is demonstrating a strong commitment to not just participating in the Fintech evolution, but leading it," the executive added.
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The deal is expected to close in either Q1 or Q2 2018, subject to regulatory approval.
However, S&P has warned investors that the acquisition will result in reduced 2018 GAPP diluted EPS guidance. The company intends to reduce its guidance level by roughly 20 cents per share, in the range of $7.95 -- $8.10.