Morningstar to Buy Ibbotson

Morningstar Inc., the stock and mutual fund research company, has agreed to buy financial consulting firm Ibbotson Associates for $83 million, the two companies said Monday.

Privately held Ibbotson, which like Morningstar is based in Chicago, provides asset allocation and fund research to institutions and manages 401(k) and other defined contribution plans.

Ibbotson had $37 million in revenue for the fiscal year ended June 30, making it about a quarter the size of Morningstar.

Joe Mansueto, Morningstar’s chairman and chief executive, said the acquisition would strengthen Morningstar’s institutional and advisor businesses and make it one of the largest independent providers of managed retirement accounts.

“We will immediately broaden our reach in the areas of investment consulting, investment management and managed retirement accounts,” he said.

Ibbotson’s founder, Roger Ibbotson, and its president, Mike Henkel, said they would stay with the expanded company.

The transaction is expected to close in the first quarter of 2006.

Shares of Morningstar fell 50 cents, or 1.4%, to $34.34. They have nearly doubled since going public at an initial public offering price of $18.50 in May.