HEMSCOTT IR, the UK-based investor relations website provider that claims 540 companies as clients, was sold yesterday by parent Ipreo Holdings LLC to U.S.-based investment research provider Morningstar, Inc. (NASDAQ:MORN).But it’s abundantly clear from the deal announcement that Morningstar doesn’t really care about the IR website business it is getting as part of a wider deal. What Morningstar is really after is Hemscott’s equity data products, which includes information on 19,500 public companies in the UK, Ireland, the US and Canada.
The deal expands Morningstar’s business into the UK, a beachhead it is willing to pay $51.6 million to acquire.
As for the Hemscott IR website business, it barely gets a mention in the release. In fact, it’s the very last thing to be mentioned by Joe Mansueto, chairman and chief executive officer of Morningstar.
It’s interesting, too, that Ipreo did not see synergy potential between its other corporate investor relations services, such as investor targeting and perception analysis, and Hemscott’s 540 corporate clients.
Makes you wonder what’s wrong with the cookie-cutter IR website business. My guess is that the investments required to make template-based sites competitive in a Web 2.0 world are upsetting the economics of the model.