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RBICS Extended Universe – Opening Doors for Private Company Analysis

private-equity
mergers
factset
(Mackenzie Hargrave) #1

As capital continues to flow into private markets at a growing rate, our clients seek transparency into the private company landscape. FactSet has answered by releasing the RBICS Extended Universe DataFeed, which classifies over 3 million entities, including 1.2 million private companies, according to the precise and comprehensive Revere Business Industry Classification System (RBICS) taxonomy.

RBICS Extended Universe provides four levels of sector and industry classifications. The fourth level, Industry Group, is the most granular with 316 groups. RBICS Extended Universe’s use of one taxonomy to classify public and private companies allows us to uncover peers across company types that previously required manual identification.

Linking these granular peer groups to other content sets provides an opportunity to analyze trends across public and private companies. With this in mind, I was curious to see how RBICS Extended Universe can be used to generate a peer universe and analyze M&A activity in a given Industry Group.

Using Squarespace, Inc. as an example, we can see that RBICS Extended Universe classifies its Industry Group as Internet Hosting Services.

Using RBICS Focus, which classifies a company’s primary business line using publicly reported revenues, we can identify 23 peers in the Internet Hosting Services Industry Group.

This picture changes drastically using RBICS Extended Universe. Now, we can capture over 4,000 Internet Hosting Services companies, including over 1,200 private companies.

This large universe of companies falling within a granular Industry Group can be used to inform analysis of M&A activity by isolating deals with buyers in the Internet Hosting Services Industry Group. I used this peer universe to screen for M&A transactions in the FactSet Mergers database and identified 53 deals announced in the last year with a buyer in the Internet Hosting Services Industry Group. Of the 53 deals, 19 involved a target in the General and Mixed Type Software or Mixed International Telecommunications Services Industry Groups. A closer look at the transactions reveals that GoDaddy, Inc. acquired a company in each of these groups in the last year, Plasso, Inc and Sellbrite, Inc.

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Drawing these connections is possible through combining the extensive coverage of RBICS Extended Universe with FactSet Mergers. However, this is only one example of combining a content set with RBICS Extended Universe to add a layer to private company analysis.

We are interested to hear how RBICS Extended Universe can add value to your investment process. Which content sets would you combine with RBICS Extended Universe?

To learn more about the RBICS Extended Universe DataFeed, please visit the RBICS on the Open:FactSet Marketplace.

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