LSEG to buy Octus from Permira for $3.5bn, lifts full-year guidance

(Sharecast News) - London Stock Exchange Group announced on Thursday that it has agreed to buy credit specialist Octus from Permira for $3.5bn, as it lifted its full-year guidance. Founded in 2013 by Kent Collier, Octus provides credit solutions across intelligence, data and analytics, serving customers across private, illiquid and distressed credit. Headquartered in New York and with a global footprint, it has over 900 employees, 750 customers and more than 40,000 individual users including buy-side firms, investment banks, law firms and advisory firms.

LSEG said the acquisition will transform its presence in credit and private market data, "creating a leading proposition in these high-growth areas".

In 2026, Octus is expected to generate more than $300m in revenue, with strong double-digit growth and an adjusted EBITDA margin of around 40%. LSEG noted that it has achieved double-digit compound growth in revenue since 2022.

Chief executive David Schwimmer said: "Combining Octus' leading proprietary data and intelligence with LSEG's data and analytics business creates a powerful offering for our customers, and further accelerates our growth. Acquiring Octus enables LSEG to deliver best-in-class credit data, intelligence and workflows, across the liquidity spectrum, to a broader range of customers.

"LSEG's existing data and analytics capabilities, alongside the acquisition of Trumid announced by Tradeweb and now the acquisition of Octus, position LSEG as a global leader in fixed income to partner with our customers throughout the trade lifecycle."

News of the acquisition came alongside a third-quarter trading update from the company, which lifted its full-year guidance for revenue growth, EBITDA margins and cash flow.

LSEG posted a 9.5% jump in third-quarter gross profit to £2.2bn. It highlighted "strong", broad-based growth, led by the markets division.

The company now expects full-year revenue growth of at least 8%, up from previous guidance of 7% to 7.5% and EBITDA margin expansion of 100-120 basis points, up from previous guidance of around 100 basis points. LSEG also lifted its equity free cash flow guidance to at least £2.8bn, from £2.7bn

Schwimmer said: "LSEG's record performance continued in Q3, with accelerating growth across our subscription businesses and sustained performance in Markets. Reflecting this strength, we are raising our full-year guidance for revenue, EBITDA margin and free cash flow. We continue to work with the world's leading financial institutions as they experiment with, integrate and scale AI across their organisations.

"LSEG is on track to deliver its strongest annual growth since 2018, and we continue to invest to further enhance our capacity for sustained, long-term growth and value creation, building a business that is better positioned than ever."

At 0813 BST, the shares were up 2.2% at 8,982p.

See latest RNS on Sharecast