Carlyle and Warburg Pincus in advanced talks to buy credit rating agency DBRS

A consortium of private equity firms Carlyle Group and Warburg Pincus are in advanced talks to buy credit rating agency DBRS Ltd for more than $500 million, Reuters yesterday reported citing people familiar with the matter.

Final bids were also submitted by Canadian private equity firm Birch Hill Equity Partners Management Inc, the report said, and added that Carlyle and Warburg Pincus are in the lead partly because they have a global footprint that can help DBRS expand further internationally.

DBRS was founded in 1976 by Walter Schroeder, who had in August hired investment bank Perella Weinberg Partners to run an auction.

Toronto-based DBRS is the world's fourth-largest credit rating agency after Standard & Poor's Financial Services, Moody's Corp and Fitch Ratings Inc, but the biggest in Canada.

Standard & Poor's, Moody's and Fitch hold more than 95 per cent share of the ratings market, DBRS holds merely 2 per cent market share.

Based in Toronto and with offices in New York, Chicago and London, DBRS rates more than 1,000 different companies and single-purpose vehicles that issue commercial paper, term debt and preferred shares in the global capital markets.

Apart from providing credit rating opinions to financial institutions, corporate entities, government bodies and various structured finance product groups in North America, Europe, Australasia and South America, DBRS also provides investors with detailed surveillance reports, in-depth company reports, industry studies, commentaries and peer group assessments.