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State Street to Buy Mercatus; Shares Rise

Financial services provider State Street Corporation (STT) announced that it has entered into an agreement to acquire front-and-middle-office solutions and data management provider Mercatus. The terms of the deal, which is likely to close in September, have not been disclosed so far.

Following the news release, shares of the company gained 2.8% to close at $85.13 in Wednesday’s trading session.

With this buyout, the company will also launch its State Street Alpha for Private Markets solution. This offering is aimed at helping institutional investors efficiently manage the entire lifecycle of their infrastructure, private equity, real estate, private debt and fund of funds investments through a fully integrated, digital front-to-back, single platform. 

The CEO of Charles River Development, a subsidiary of State Street, Spiros Giannaros, said “Mercatus’s focus and solution for private markets augment Charles River’s market-leading platform for public markets, enabling us to support clients across the full spectrum of their investment needs.” (See State Street stock chart on TipRanks)

Recently, Jefferies analyst Ken Usdin reiterated a Buy rating on the stock. The analyst, however, raised the price target to $95 from $93, which implies upside potential of 11.6% from current levels.

The Wall Street community is cautiously optimistic about the stock with a Moderate Buy consensus based on 5 Buys and 4 Holds. The average State Street price target of $94.88 implies 11.5% upside potential from current levels.

State Street scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations. Shares have gained 38.7% over the past year.

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