Moody's Corporation to Acquire Fermat International

18 September 2008

Moody's Corporation (NYSE:MCO) announced today that it has agreed to acquire Fermat International, a leading provider of risk and performance management software to the global banking sector. The combination of Moody's credit portfolio management and economic capital tools with Fermat's expertise in risk management software positions Moody's to deliver comprehensive analytical solutions for financial institutions worldwide.

Moody's will purchase Fermat for 132.5 million ($189 million), subject to customary closing adjustments. An additional sum of up to 25 million ($36 million) in consideration may be paid based on achievement of certain financial targets by year-end 2008. The acquisition will be funded primarily from offshore cash on hand, and Fermat will operate as part of Moody's Analytics. "Fermat is very highly-regarded for its risk products, global client base and software development professionals," said Raymond W. McDaniel, Jr., Chairman and Chief Executive Officer of Moody's Corporation. "This acquisition provides a strong complement to Moody's Analytics and accelerates our goal of offering a comprehensive, end-to-end risk management solution to commercial banks and other financial institutions."

The acquisition combines leading risk management platforms from Moody's Analytics and Fermat. By leveraging a proprietary and robust data management platform, Fermat helps banks meet regulatory capital requirements and provides risk management and performance monitoring capabilities. With installations at more than 100 banks -- primarily in Europe, the Middle East and Asia -- Fermat significantly extends the functional and geographic scope of the Moody's Analytics suite of banking software. Founded in 1996, Brussels-based Fermat International has approximately 275 employees located worldwide serving customers in 30 countries, with significant operational and development hubs in France and Singapore.

"Fermat is very pleased to become part of an organization with Moody's global presence and expertise in risk management products," said a spokesman for Fermat's partners. "Moody's will help Fermat reach new customers seeking integrated risk and performance management solutions."

Moody's anticipates that this acquisition will add incremental annual revenues of approximately $75 million to $85 million by 2010, with lower incremental 2009 revenues reflecting most of the impact from purchase accounting and deferrals associated with conversion to U.S. GAAP. Future revenue growth will be achieved through license sales and fees from software maintenance and related professional services. The acquisition is expected to be $0.05 to $0.07 dilutive to earnings per share (EPS) in the fourth quarter of 2008, dependent on purchase accounting adjustments and the actual closing date. This transaction is expected to be accretive to EPS by the fourth quarter of 2009 and thereafter; the impact on full-year 2009 EPS is expected to be modestly dilutive.

The acquisition is expected to be completed in approximately 30 to 45 days, subject to regulatory review and customary closing conditions. Moody's Corporation was advised by Greenhill & Co. on this transaction. Fermat International was advised by Jefferies International Limited.

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