London Stock Exchange Agrees to Buy Octus for $3.535 Billion in Cash
Key Facts
London Stock Exchange Group announced on October 22 that it had agreed to buy Octus for $3.535 billion in cash, expanding its presence in private and illiquid credit data. The agreement covers the purchase from funds advised by Permira and Octus management, including founder Kent Collier. The group had confirmed on October 13 that it was in talks to buy the company for about $3.5 billion, with no definitive agreement reached at the time and no guarantee that a deal would be completed. The transaction is subject to regulatory approvals, and LSEG expects to complete it in the first half of 2027. Group Chief Executive David Schwimmer said combining Octus data and information with the group's businesses "creates a compelling proposition for our customers and accelerates our growth."
The deal gives LSEG a specialization in private and illiquid credit, complementing its existing fixed-income and liquid-credit data and analytics. The group said combining Octus capabilities would provide a single source for fixed-income data, analytics and workflow across public and private credit. LSEG estimated the private-credit industry at $3.5 trillion and the market for data, workflow and access services related to private markets at between $7 and $9 billion. The group expects this sector to grow at a double-digit rate. These figures place the deal in a market that LSEG sees expanding, with demand for specialist tools serving private-credit participants.
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%. The group said the company's revenue has recorded double-digit compound annual growth since 2022. Octus has more than 900 employees, 750 clients and more than 40,000 individual users, and was founded in 2013 by Kent Collier. The deal's financial projections are based on a subscription business and a broad user base, according to figures provided by the two companies. The announcement did not provide a comparison with Octus's valuation when Permira acquired it, so the deal valuation here is not based on a prior valuation trajectory.
LSEG expects the deal to immediately boost organic revenue growth in its Data & Analytics division and to add to the group's guidance for organic subscription revenue growth of about 7% in 2027. In contrast, it expects the deal to be neutral to adjusted earnings per share in the first full year after completion, and accretive thereafter. The group said it would fund the acquisition through external debt. The deal comes as the Data & Analytics division recorded growth of 5.2% on a constant-currency basis in the third quarter of 2026, while gross income excluding recoveries rose 8.8%. Schwimmer said the group's record performance continued during the quarter, with subscription business growth accelerating and full-year guidance raised for revenue, EBITDA margin and free cash flow.
According to Reuters, LSEG shares rose about 6% on October 22, erasing their losses since the start of the year and putting them up 4% for the year. On a call with investors, Schwimmer said the group had considered many deals over the past five years, but only a few met its criteria, adding: "These acquisitions deliver both strategic fit and financial return." The Octus deal aligns with a broader credit strategy; LSEG said Tradeweb's planned acquisition of Trumid, together with its existing liquid-credit capabilities, supports building a global position in fixed-income data and trading. For its 2026 guidance, the group expects organic income growth of at least 8.0% and free cash flow to equity of at least £2.8 billion. After completion, Octus will join LSEG's Data & Analytics division, and Kent Collier will continue to lead its business.