LSEG raises growth forecast to 8.0%, agrees to buy Octus
Key Facts
London Stock Exchange Group raised its forecast for annual total income growth, excluding recoveries, to at least 8.0% in 2026 on an organic, constant-currency basis, according to its trading statement issued on October 22. The group had forecast growth of between 7.0% and 7.5% when it reported first-half results. The upgrade came after total income, excluding recoveries, reached £2,407 million in the third quarter, compared with £2,219 million in the same period of 2025. This income rose 8.5% on a reported basis and 8.8% on an organic, constant-currency basis. Alongside the outlook update, the group announced an agreement to buy Octus for $3.535 billion in cash from funds managed by Permira and Octus management, including its founder Kent Collier.
The revised outlook included raising the target range for EBITDA margin expansion to 100–120 basis points during 2026 at constant exchange rates. Guidance issued with the first-half results had targeted expansion of around 100 basis points. The group also raised its equity free cash flow forecast to "at least £2.8 billion", according to the results statement. That compares with a previous target of £2.7 billion for the same year. In a separate deal announcement, the group said the Octus acquisition would be financed with external debt.
Across its businesses, Data & Analytics income grew 5.2% in the third quarter, according to the results update carried by Investing.com. Growth at FTSE Russell reached 10.2%, while Risk Intelligence posted growth of 9.8%. The group attributed the strength of its Markets business to continued geopolitical uncertainty and market volatility, alongside the shift to electronic trading and demand for capital efficiency and risk management. It also cited good demand for cloud solutions and private markets content within Data & Analytics. Both areas have been the focus of recent investment by the group, according to the trading statement. In its results presentation, the group said "95% of our top 200 clients use the group's AI solutions". It added that 80% of clients buying an AI licence also buy additional datasets.
Octus provides credit intelligence, data and workflow solutions, according to LSEG's statement on the acquisition talks. Its client base includes investment firms, investment banks, law firms and consultancies. Founded in 2013 and formerly known as Reorg, the company said when it announced its rebranding that its user base included more than 35,000 industry professionals. Permira acquired a controlling stake from Warburg Pincus in 2022 at a valuation of $1.3 billion, according to Reuters. The deal is part of LSEG's transformation into a financial infrastructure and data provider, after it completed the purchase of Refinitiv in an all-share deal in January 2021. During the trading session when the Octus talks were announced, before the definitive agreement, losses in the group's shares widened to 4.7% at 13:42 GMT, according to a Reuters report published on October 13, 2026.
According to the deal announcement, LSEG expects Octus revenue to exceed $300 million in 2026, with strong double-digit growth. It expects the company's adjusted EBITDA margin to reach around 40% in the same year. The acquisition is expected to have a neutral impact on the group's adjusted earnings per share in the first full year after completion. The group said the deal would be accretive to adjusted earnings per share after that year. The acquisition is expected to close in the first half of 2027, subject to regulatory approval.