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Morningstar Raises $140 Million in Long-Awaited IPO

The fund tracker trumps regulatory and underwriting hurdles.



raised $140 million in its long-awaited initial public offering.

The mutual fund tracker priced a 7.6 million-share IPO Monday night at $18.50 a share. That's toward the high end of the company's expected range of $16 to $19 a share. The offering came almost a year to the day after Morningstar filed to go public, following a number of public detours along the way.

The Chicago-based research house said all the shares are being sold by affiliates of venture capital giant Softbank. The shares will start trading Tuesday on the


. WR Hambrecht acted as the sole managing underwriter of the offering, which was made through the company's auction-based process.

Morgan Stanley was originally tapped as lead underwriter for the IPO, but Morningstar changed course in January.

"Our original group of underwriters elected not to participate in the auction approach, and we amicably parted ways," Morningstar CEO Joe Mansueto said at the time. "Our previous lead underwriter, Morgan Stanley, did an outstanding job to get us to this stage, and I thank them for their efforts."

Morningstar also overcame a number of regulatory hurdles. Notable among these was an inquiry by New York Attorney General Eliot Spitzer regarding investment consulting services Morningstar provides to retirement plan providers. Morningstar also faced questions from the

Securities and Exchange Commission

last September over incorrect data it published concerning the returns of the Rock Canyon Top Flight fund.

Morningstar's use of the auction format echoes last year's biggest deal, the IPO of Internet search star



. That company famously made its public debut after a last-minute price cut. After much wrangling, Google shares eventually priced at $85. They have since more than doubled in value.

Mansueto founded the company in 1984 out of his Chicago apartment. Since then it has grown to provide research on a wide array of investment vehicles, from stocks and mutual funds to variable annuities and so-called 529 college-savings plans. The company tracks more than 100,000 investment offerings and is best known for its use of a five-star rating system on mutual funds.

Morningstar also granted the underwriters the right to purchase up to an additional 1.15 million shares at the IPO price to cover over-allotments, if any.