Exclusive-Hg weighs sale of $1.9 billion financial data firm FE fundinfo

By Amy-Jo Crowley and Emma-Victoria Farr

LONDON/FRANKFURT (Reuters) -Buyout company Hg has begun lining up advisers to explore a possible sale of its financial data firm FE fundinfo, three people familiar with the matter told Reuters, following on from a series of deals in the highly valued sector.

The London-based FE fundinfo could generate around 70 million pounds ($93.2 million) in earnings before interest, taxes, depreciation, and amortisation this year and could fetch more than 20 times this in a sale.

That would make it worth more than 1.4 billion pounds, one of the sources said. All three sources spoke on condition of anonymity because the talks are private.

They said no final decision had been taken and preparations were at an early stage. Although they expected Hg to proceed with an auction towards the end of the year, the timeline could slip into next year.   

Hg and FE fundinfo declined to comment.

FE fundinfo, which provides investment data and performance analysis to asset managers and other financial institutions, is expected to attract attention from global exchange and wealth management groups as well as private equity firms, one of the people said.

    In a series of deals over recent years, companies that provide specialised financial technology and data to clients including banks, asset managers and investment groups, have changed hands at elevated valuation multiples.

Financial software provider SS&C Technologies in July bought Calastone for about 766 million pounds, and UK data group Preqin was sold to BlackRock last year for 2.55 billion pounds.

A possible sale of FE fundinfo also highlights how private equity, after sitting on the sidelines of dealmaking, has again become active, helping drive global M&A to a $2.6 trillion peak year-to-date.

The company was created in 2018 through the merger of three companies FE, F2C and fundinfo, the same year that Hg became an investor.

It has made five acquisitions in the last year, including data firm Fundipedia in May, UK-based Lunar AI in April and German fintech specialist Dericon last year, all for undisclosed amounts.     FE fundinfo connects fund managers and fund distributors, which it says enables them to share and act on trusted information to make investment more efficient.

($1 = 0.7519 pounds)

(Reporting by Emma-Victoria Farr and Amy-Jo Crowley, editing by Anousha Sakoui and Barbara Lewis)