ER Lake and Warburg Pincus are to buy financial data provider Interactive Data (IDC) for $3.4bn (£2.2bn) in cash, including a $2bn payment to majority owner Pearson which it will use for expansion purposes.
Pearson – which owns the Financial Times, Penguin Books and a large education business – said it would use the proceeds from the sale of its most profitable unit to accelerate its expansion through bolt-on acquisitions. The sale of IDC to the two private equity firms is the biggest leveraged buyout so far this year.
“Pearson and Interactive Data have extensive growth opportunities and ambitious expansion plans,” Pearson chief executive Marjorie Scardino said in a statement. “We believe this transaction will give both companies greater focus and opportunity to invest more in their strong market positions,” she added.
Analyst Alex DeGroote of brokerage Panmure said: “The key point from Pearson’s point of view is that the money doesn’t go back to shareholders. Ordinarily when you do a transformational deal like this, selling 15 per cent of your market cap, you’d give something back.”
Pearson said it would look for bolt-on acquisitions with a particular focus on technology and services that would complement its international, consumer and professional-education businesses.