Key Takeaways
- • LSEG Group is in talks to acquire New York-based credit data provider Octus from private equity firm Permira for approximately £2.6bn (about $3.5bn), according to LSEG's confirmation following a Reuters report.
- • Permira acquired a controlling stake in Octus in 2022 at a valuation of £1bn and has been preparing a sale since last year, having held talks with other potential buyers.
- • LSEG says Octus would immediately boost its revenue growth; no final agreement has been reached and any transaction would require regulatory approval.
- • LSEG shares closed 4.7% lower at 8350p on the news, though RBC analyst Ben Bathurst called the reaction 'overdone' and said the deal is unlikely to jeopardise the group's £3bn share buyback plans.
- • The talks come against a backdrop of heavy UK M&A activity and listing outflows, with Peel Hunt noting 166 takeovers worth £180bn since the start of 2023.
Summary
London Stock Exchange Group (LSEG) is in talks to buy Octus, a New York-based financial data business, for £2.6bn, a transaction that would reverse the usual pattern of US acquirers buying British firms. LSEG confirmed the discussions to acquire Octus from private equity firm Permira after a Reuters report, according to This is Money. The Financial Times reported that the deal could value the data group at $3.5bn.
Permira, a London-based private equity firm, acquired a controlling stake in Octus in a 2022 deal valuing the business at £1bn. Permira has been planning a sale since last year and has held talks with other potential buyers. Octus provides information for credit markets, with a focus on companies in financial distress, serving banks and investors. Its operations employ journalists, analysts and legal experts, alongside technology that scans regulatory and court filings.
LSEG said it holds a leading position in the high-growth area of illiquid and private credit, citing a strong track record of double-digit revenue growth based on a high-retention subscription model. The group said acquiring Octus would immediately boost its revenue growth. LSEG stressed that no final agreement has been reached and that a deal is not guaranteed. Any transaction would need regulatory approval. LSEG owns the London Stock Exchange but earns most of its income from its data and analytics division, which was expanded by the £20bn acquisition of Refinitiv in 2021.
LSEG shares closed 4.7% lower, or 410p down, at 8350p after the Octus details emerged. RBC analyst Ben Bathurst said the reaction looked 'overdone' and that the deal was unlikely to jeopardise the group's plans for £3bn of share buybacks. Bathurst added that LSEG's confirmation of a specific consideration figure suggested discussions were fairly advanced.
The transaction also sits within broader concerns about the London market. Peel Hunt warned of the 'unprecedented pace' of M&A activity, citing 166 takeovers worth £180bn since the start of 2023, including £74bn so far this year. Targets this year have included easyJet, Segro, Beazley, Schroders and Tate & Lyle. Over the same period, there have been just 11 IPOs worth £6bn, and firms including Flutter and Tui have moved listings to rival exchanges in New York and Europe. Peel Hunt's head of research Charles Hall described the UK's difficulty retaining and attracting listings as 'a massive understatement.'
Permira, a London-based private equity firm, acquired a controlling stake in Octus in a 2022 deal valuing the business at £1bn. Permira has been planning a sale since last year and has held talks with other potential buyers. Octus provides information for credit markets, with a focus on companies in financial distress, serving banks and investors. Its operations employ journalists, analysts and legal experts, alongside technology that scans regulatory and court filings.
LSEG said it holds a leading position in the high-growth area of illiquid and private credit, citing a strong track record of double-digit revenue growth based on a high-retention subscription model. The group said acquiring Octus would immediately boost its revenue growth. LSEG stressed that no final agreement has been reached and that a deal is not guaranteed. Any transaction would need regulatory approval. LSEG owns the London Stock Exchange but earns most of its income from its data and analytics division, which was expanded by the £20bn acquisition of Refinitiv in 2021.
LSEG shares closed 4.7% lower, or 410p down, at 8350p after the Octus details emerged. RBC analyst Ben Bathurst said the reaction looked 'overdone' and that the deal was unlikely to jeopardise the group's plans for £3bn of share buybacks. Bathurst added that LSEG's confirmation of a specific consideration figure suggested discussions were fairly advanced.
The transaction also sits within broader concerns about the London market. Peel Hunt warned of the 'unprecedented pace' of M&A activity, citing 166 takeovers worth £180bn since the start of 2023, including £74bn so far this year. Targets this year have included easyJet, Segro, Beazley, Schroders and Tate & Lyle. Over the same period, there have been just 11 IPOs worth £6bn, and firms including Flutter and Tui have moved listings to rival exchanges in New York and Europe. Peel Hunt's head of research Charles Hall described the UK's difficulty retaining and attracting listings as 'a massive understatement.'
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