Transactions

March 2010
Santa Fe, New Mexico
has been acquired by
Jersey City, New Jersey


Background

Strategic Analytics is a risk analytics software company that targeted large banks and consumer finance institutions with portfolios of retail loans (auto, credit card, mortgage, home equity, personal loans, etc.). The Company’s software enables clients to produce loan portfolio analysis for risk management; and accurate forecasts of loan portfolio performance for portfolio rebalancing; as well as a wide range of management reports including “what if” stress testing results.

Two of Strategic Analytics founders, Joe Breeden and Anthony Giancola, had both worked for the Los Alamos-based Center for Adaptive Systems Applications (CASA) – a spin off from Los Alamos National Laboratory and the Santa Fe Institute, focused on applied machine learning, adaptive computation, and other data mining techniques for the prediction of customer behavior.  

The third founder - David Franklin, who had relocated to Santa Fe from Greenwich, CT, had been a principal in a firm that performed industry market share surveys and analyzed compensations.

Together, they started Strategic Analytics to provide leading-edge risk management and analytical software solutions. Nine months after they came together, the Company filed for patents on its proprietary Dual-time Dynamics technology, and signed its first customer, Discover Card.  Nine years later the Company’s software was being used to analyze more than $2 trillion in retail assets and the founders were ready to join another larger firm with the resources to help them take the firm to the next level.



The founders of Strategic Analytics had been in contact with Marlin & Associates for several years.  When they decided it was time to seek a strategic partner they reached out to M&A.  M&A then helped them conduct an organized and a disciplined process that led to serious discussions with more than twelve potential strategic partners. 

On March 1, 2010, seven months after engaging M&A, Strategic Analytics was acquired by Verisk Analytics through its Interthinx business. 

Together with Strategic Analytics, Interthinx will be able to offer a wide range of mortgage risk analytics products including  The Mortgage Risk Model ™ (MRM), which gives retail lenders access to a comprehensive mortgage loan-level database – incorporating the vast majority of non-agency loans for the residential mortgage-backed securities market and then adding forecasting technology to incorporate significant measures of origination quality, maturation effects, and environmental factors into analytics tests that traditional modeling methodologies do not effectively capture.

Marlin & Associates initiated the transaction, managed the process, assisted in the negotiations and acted as exclusive strategic and financial advisor to the sellers.

Verisk Analytics Acquires Strategic Analytics

March 01, 2010

As a division of Interthinx, Strategic Analytics adds forecasting and stress-testing capabilities to serve consumer lending and residential mortgage markets.

JERSEY CITY, N.J., March 1, 2010 (GLOBE NEWSWIRE) – Verisk Analytics, Inc. (NASDAQ: VRSK) today announced the acquisition of Strategic Analytics, a leading provider of credit risk and capital management solutions to consumer and mortgage lenders. As part of the Interthinx business unit of Verisk Analytics, Strategic Analytics will provide customers advanced solutions and professional services critical to loss forecasting and the stability of the U.S. residential mortgage market.

“The Strategic Analytics solution and application set will allow our customers to take advantage of state-of-the-art loss forecasting, stress testing, and economic capital requirement tools to better understand and forecast the risk in their credit portfolios,” said Kevin Coop, president of Interthinx. “These tools are applicable and are currently deployed in all verticals of consumer lending, including automotive, credit card, and student loans, and mortgages,” added Coop.

Through Strategic Analytics, Interthinx will offer various mortgage risk analytics products. The Mortgage Risk ModelTM (MRM) gives retail lenders access to a comprehensive mortgage loan-level database – incorporating the vast majority of non-agency loans for the residential mortgage-backed securities market. Forecasting technology is available to incorporate significant measures of origination quality, maturation effects, and environmental factors into analytics tests that traditional roll-rate modeling methodologies cannot effectively capture.

The acquisition will also provide Interthinx customers access to the mortgage-backed securities/asset-backed securities (MBS/ABS) Securities Forecasting Service (SFS), as well as accurate cash flow, conditional payment rate, conditional default rate, and loss severity projections for lenders and investors to price and trade mortgage assets with high efficiency.

“Strategic Analytics advanced modeling software uniquely transforms data from one of the largest repositories of loan-level mortgage data into usable business intelligence,” said Joe Breeden, president of Strategic Analytics. “We are excited to become part of the Verisk Analytics and Interthinx team. This affiliation will significantly boost our objective of providing mission-critical credit risk management solutions to our customers worldwide.”

Marlin & Associates New York LLC acted as exclusive strategic and financial advisor to Strategic Analytics.

About Strategic Analytics

Analytics Strategic Analytics provides credit risk and capital management solutions to the world’s leading consumer and mortgage lenders. Designed specifically for the unique challenges in retail credit modeling, our advanced software applications and professional services enable clients to build and manage more profitable and less volatile portfolios, enhance regulatory compliance, and increase shareholder value. Strategic Analytics helps clients to analyze trillions of dollars in retail loans in countries worldwide. For more information, visit www.strategicanalytics.com

About Interthinx

Interthinx, Inc., a Verisk Analytics subsidiary, is a leading national provider of proven risk mitigation and regulatory compliance tools for the financial services industry. At every point in the mortgage life cycle, Interthinx helps to assess risk and prevent mortgage fraud and compliance violations. More than 1,100 customers — including 15 of the top 20 mortgage lenders and three of the top five largest financial institutions — employ the company?s products and services. Interthinx earned Mortgage Technology magazine?s prestigious 10X Award as “a diagnostic and corrective solution of the highest order” for its technological expertise in predictive analytics, data mining, and risk scoring. The Interthinx suite of solutions sets the standard for the industry and directly increases the value of client portfolios. For more information, visit www.interthinx.com. About Verisk Analytics Verisk Analytics (NASDAQ: VRSK) is a leading provider of risk assessment solutions to professionals in insurance, healthcare, mortgage lending, government, risk management, and human resources. Using advanced technologies to collect and analyze billions of records, Verisk Analytics draws on vast industry expertise and unique proprietary data sets to provide predictive analytics and decision-support solutions in fraud prevention, actuarial science, insurance coverages, fire protection, catastrophe and weather risk, data management, and many other fields. In the United States and around the world, Verisk Analytics helps customers protect people, property, and financial assets.

About Marlin & Associates

Founded in 2002, Marlin & Associates Holding LLC (“M&A”) is a boutique investment banking and strategic consulting firm focused on providing transaction-related services to U.S. and international firms engaged in information technology and healthcare services. The firm is based in New York City, with offices in Washington, DC and Toronto, Canada and has been the recipient of numerous awards. M&A’s professionals have advised on over 200 successfully completed transactions in the technology, information, and healthcare sectors, including:

CONTACT:

Contact@MarlinLLC.com | +1 (212) 257-6300

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