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Margaret Kirch Cohenmargaret.cohen@morningstar.com
Morningstar Acquires VARDS Unit from Finetre

HERNDON, VA, and CHICAGO, Jan. 11, 2005 –  Finetre Corporation and Morningstar, Inc. today announced that Morningstar has acquired Finetre’s VARDS unit for $9 million in cash, subject to an adjustment for working capital. The transaction was completed on Friday, Jan. 7, 2005.

The Variable Annuity Research and Data Service (VARDS), founded in 1988, provides research and data on variable annuity products and is used by nearly every firm that offers variable annuities. The service is also used by many brokerage firms for research, due diligence, and suitability determination. 

The firms plan to work together to integrate the VARDS Web-based research products with Finetre’s AnnuityNet platform, which provides brokerage firms with online transaction processing and compliance oversight capabilities for annuities and other insurance and investment vehicles. The planned integration will provide brokers with access to information and research in real time as they complete transactions.

“We have been collecting variable annuity data since the early 1990s, and we significantly enhanced our VA data in 2003,” said Joe Mansueto, chairman and chief executive officer of Morningstar. “The VARDS acquisition further strengthens Morningstar’s investment database and complements our business well. Many people invest in variable annuities. It’s important that they have the best possible information to help them choose wisely among a wide array of investment offerings.”

“Finetre’s core business of annuity transaction processing and compliance automation is experiencing very rapid growth. That fact combined with the obvious strategic fit of VARDS with Morningstar makes this transaction a win for all parties, especially VARDS clients,” said Shane Chalke, chief executive officer of Finetre. “This sale will enable us to make additional strategic investments in our core business and increase the management bandwidth we can focus on carefully managing that growth.”

Finetre acquired Atlanta-based VARDS from Wachovia Corporation in 2003 as part of its purchase of Wachovia’s Info-One unit. Since that time, Finetre has implemented many improvements and product upgrades and significantly increased revenue.

Finetre was advised in the transaction by Chris DeWinter of Cypress Associates, LLC.

About Finetre Corporation

Founded in 1997, Finetre Corporation is a Herndon, Va.-based software technology firm focusing on transaction processing and compliance automation in the financial services industry. Finetre’s AnnuityNet platform currently processes approximately 10,000 annuity applications and additional deposit transactions for more than 20 brokerage firms each month over the Internet. Finetre is privately held by investors including: GE Financial Assurance/GE Equity, Lincoln Financial Group, Conning Capital Partners, The Phoenix Companies, Wachovia Insurance Agency, Inc., Ohio National Financial Services, FBR Financial Services Partners, and SunLife Financial.

About Morningstar, Inc.

Chicago-based Morningstar, Inc. is a leading provider of independent investment research in the United States and in major international markets. The company offers an extensive line of Internet, software, and print-based products and services for individuals, financial advisors and institutions. The company has operations in 16 countries.

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