Moody's Investors Service announced Thursday that it has acquired Crowe, Chizek & Co.'s software products group, doubling the size of the rating agency's software business for helping banks evaluate commercial loans.
The deal combines the two largest providers of scoring products for bank and other financial companies that lend to middle-market companies.
Under the name Moody's Risk Management Services, the combined entity now has 165 employees in six offices in the United States and Europe serving 4,000 clients. Layoffs will be "minimal," according to Moody's.
Chicago-based Moody's said it now can offer a broader product base for banks, including commercial credit analysis, portfolio risk management services, credit training, and consulting. Crowe Chizek, based in Indianapolis, will continue its accounting and consulting for financial institutions.
"Moody's will offer a complete array of the most effective credit assessment and risk management capabilities to serve the needs of the smallest and largest institutions," said John Rutherford, president.
After buying its largest competitor, Moody's said it now controls 80% of the commercial credit software market. Both companies had competed head-to-head in the credit software business for 15 years. Financial terms of the transaction were not disclosed.
Jack Gregory, former managing executive of Crowe Chizek's software products group, has joined Moody's as the unit's managing director.
"There is a great deal of excitement bringing these two organizations together," Mr. Gregory said. "We felt going forward - in order to drive the rating products - we needed strong branding and validation. Moody's brings both in a significant way."
The products of the combined operation help banks determine the credit-worthiness of commercial loans, especially those to middle-market private and public companies that carry no credit ratings.
The service also helps rate portfolios so clients can meet regulatory requirements. A key area for growth, Mr. Gregory said, will be helping banks comply with the new international capital standards. The company is also developing analysis products that will help clients rate portfolios for securitization to investors.
"There is a great growth opportunity out there and an incredible need to provide this type of service," Mr. Gregory said.
