Founded in 1976 as Dominion Bond Rating Service, DBRS has a much smaller market share than the “big three” credit rating agencies, Standard & Poor’s, Moody’s Investors Service and Fitch. The sale to private equity firms, which was announced on Monday, could help DBRS expand in North America and Europe. Terms of the transaction were not disclosed, but a person briefed on the matter said it was worth more than $500 million.
Walter Schroeder, the founder and controlling shareholder of DBRS, will retain a stake in the company. Individual members of DBRS management are investing alongside the private equity firms, according to the announcement. DBRS will keep its headquarters in Toronto. The deal is expected to close in the first quarter of 2015.
DBRS analyzes the risk of corporate bonds, government debt and structured financial products. Its customers include issuers of debt securities, investors in the securities and regulators. Carlyle and Warburg Pincus, which do business around the globe, were prized for their international reach.
DBRS took advice from Perella Weinberg Partners and the law firm Torys. Carlyle and Warburg Pincus were advised by CIBC World Markets and the law firms Wachtell, Lipton, Rosen & Katz and Stikeman Elliott.