London Stock Exchange to Buy Octus for $3.535 Billion, Targets 8% Income Growth

Key Facts

London Stock Exchange Group agreed to buy Octus for $3.535 billion in cash, in a deal it said would expand its offerings across public and private credit markets. The group announced the agreement on 22 October 2026, with payment to funds advised by Permira and Octus management, including founder Kent Collier. LSEG says combining Octus’s proprietary data with its fixed-income data, analytics and distribution will give customers integrated information and solutions across credit markets. On the day of the announcement, the group’s shares jumped 6%, erasing their losses for the year to that date, according to Reuters. The announcement coincided with an update showing third-quarter income growth and an increase in the group’s 2026 guidance.

Founded in 2013, Octus has more than 900 employees, 750 clients and more than 40,000 individual users, according to LSEG. The company provides data and solutions for private credit markets, which the group said are estimated at about $3.5 trillion. LSEG estimated the market for data, workflow and access solutions related to private markets at between $7 billion and $9 billion, with growth expected at a double-digit rate. The group says combining Octus’s data with its fixed-income, analytics and distribution businesses will offer customers solutions and information across public and private credit. The group’s chief executive said the deal “creates a powerful offering for our customers, and accelerates our growth as well.”

LSEG expects Octus to generate more than $300 million in revenue in 2026, with double-digit annual growth and an adjusted EBITDA margin of about 40%. Permira says Octus’s annual recurring revenue increased more than threefold during its nearly four-year ownership period. The number of products sold in credit markets also nearly doubled over that period, according to a Permira statement. Reuters reported that Permira bought a controlling stake in Octus from Warburg Pincus in 2022 at a valuation of $1.3 billion. Since then, Octus has expanded from credit intelligence into document management, core data and portfolio tools through acquisitions including FinDox, Sky Road and LevPro.

Permira said the Octus platform has completed more than four million automated classifications, one million structured data extractions and more than 250,000 content summaries since the start of 2026. These activities are part of the company’s expansion in data products and solutions linked to the credit market, alongside its core credit intelligence business. In its third-quarter update, LSEG said 95% of its largest 200 clients use its artificial intelligence products. It added that more than two-thirds of its largest 50 clients in data and analytics had connected to the group’s Model Context Protocol servers. Chief Executive David Schwimmer told Reuters that “no large language model will be able to capture this specialist data anywhere else.”

LSEG income excluding recoveries was £2.407 billion in the third quarter of 2026, compared with £2.219 billion a year earlier. Reported growth in income was 8.5%, while organic growth at constant exchange rates was 8.8%, according to the trading update. Markets led the divisions with organic growth of 12.5%, followed by FTSE Russell, up 10.2%, and Risk Intelligence, up 9.8%. Data and analytics revenue rose 5.2% on the same basis, while subscription businesses grew 6.6%. The group raised the lower end of its full-year organic income growth guidance, excluding recoveries, to 8.0% in 2026, from a range of 7.0% to 7.5% given with its first-half results.

The group expects adjusted EBITDA margin to expand by 100 to 120 basis points during 2026. It also targets at least £2.8 billion in free cash flow to equity in the same year. LSEG will finance the acquisition with external debt and expects leverage at the end of 2027 to approach the upper end of its target range of 1.5 to 2.5 times. It expects to return to the midpoint of the range by the end of 2028, according to the group’s statement. It said the deal would contribute to the group’s target of about 7% organic subscription revenue growth in 2027.

LSEG expects to complete the deal in the first half of 2027, subject to regulatory approvals, and then fold Octus into its Data & Analytics division, with Kent Collier continuing to run the business. The group said the acquisition would be neutral to adjusted earnings per share in the first full year after completion and accretive thereafter. In its financial update, the group scheduled its virtual digital markets seminar for 9 December 2026 at 2 p.m. UK time. It had also scheduled a call for analysts and investors on the third-quarter update and Octus deal for 10 a.m. UK time on the day of the announcement. Completion remains subject to the regulatory approvals cited by the group.