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LSEG agrees to buy credit data firm Octus for $3.5bn and lifts 2026 guidance again
The London exchange and data group is paying cash for a private and distressed credit specialist aimed at hedge funds and alternative managers, as third-quarter income rose 8.8%.
HedgeWeekly News Desk ·
London Stock Exchange Group agreed on Thursday to buy Octus, a New York-based provider of credit intelligence, data and workflow tools, for $3.535bn in cash financed with external debt. The sellers are funds advised by Permira and Octus management, including founder Kent Collier. LSEG expects the deal to close in the first half of 2027, subject to regulatory approval, and to be neutral to adjusted earnings per share in the first full year after completion and accretive thereafter.
Founded in 2013, Octus covers private, illiquid and distressed credit. It has more than 900 employees and 750 customers, and expects 2026 revenue above $300m at an adjusted EBITDA margin of around 40%. LSEG will fold the business into its Data & Analytics division and said it adds weight with hedge funds and alternative managers, client groups where the group has been under-penetrated.
LSEG also raised its full-year outlook for the second time this year. It now targets organic, constant-currency income growth excluding recoveries of at least 8%, compared with 7% to 7.5% at the half-year and an initial 6.5% to 7.5%, EBITDA margin expansion of 100 to 120 basis points, and equity free cash flow of at least £2.8bn, up from £2.7bn. Third-quarter income excluding recoveries grew 8.8%, led by Markets at 12.5%, followed by FTSE Russell at 10.2%, Risk Intelligence at 9.8% and Data & Analytics at 5.2%. The shares rose more than 2% in early London trading.
Why it matters: the Octus deal lands in the same week that LSEG's Tradeweb business agreed to buy electronic credit trading platform Trumid, pushing the group further into credit at both the liquid, traded end and the private and stressed end where hedge funds and credit managers buy research. For shareholders, the trade-off is balance-sheet capacity: LSEG expects net debt to adjusted EBITDA near the upper end of its 1.5 to 2.5 times range at end-2027, including the acquisitions and buybacks, before returning to the middle of the range by end-2028. Its current buyback is due to conclude by February 2027, and regulatory approval of Octus is the next milestone to watch.