Moody’s Expands Compliance Capabilities with PassFort Acquisition, Plans to Acquire kompany

Financial services company Moody’s Corporation (MCO) recently revealed that it has acquired PassFort Limited and entered into an agreement to acquire 360kompany AG (kompany). Both companies are Europe-based providers of onboarding and Know Your Customer (KYC) technology solutions. The financial terms of the deal have not been disclosed so far.

Following the news, shares of the company declined 1.1% to close at $384.78 on Friday.

Implications of the Deal

With these twin buyouts, Moody’s capabilities in the KYC, anti-money laundering, compliance, and counterparty risk spaces will be strengthened.

The PassFort acquisition, which is a SaaS-based workflow platform for identity verification, customer onboarding, and risk analysis, is expected to enable Moody’s in creating a more holistic workflow solution, allowing customers to incorporate Moody’s data, including credit, cyber, ESG, and climate analytics, directly into their proprietary processes.

Similarly, kompany’s ensuing acquisition will enable Moody’s customers to complete shareholder analysis and entity verification in real-time, along with retrieving original company filings and documents to meet their regulatory demands.

The acquisition of kompany, which is engaged in audit-proof business verification and KYC, is expected to close in the first quarter of 2022.

Management Commentary

The General Manager of Moody’s KYC business unit, Keith Berry, said, “PassFort and kompany are innovators in the compliance and regulatory space, and their technologies will upgrade and accelerate our customers’ onboarding and monitoring processes.”

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Price Target

Last month, UBS analyst Alex Kramm reiterated a Hold rating on the stock. The analyst, however, raised the price target from $392 to $412, which implies upside potential of 7.1% from current levels.

The Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 5 Buys and 3 Holds. The average Moody’s price target of $425.25 implies that the stock has upside potential of 10.5% from current levels.

Smart Score

Moody’s scores an 8 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock is likely to outperform market expectations. Shares have gained 35.9% over the past year.

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