Exclusive-Financial data group Octus readied for $4 billion-plus sale, sources say

By Amy-Jo Crowley

LONDON (Reuters) -The private equity owner of Octus is in the early stages of preparing the financial news provider for a sale, three people familiar with the matter said.

London-based buyout group Permira has held initial talks with investment bankers about a sale of Octus, known as Reorg until last year. The sale could value the business considerably north of $4 billion, one of the sources and a fourth source said. The second source said they expected a valuation of around $4 billion.

Permira is seeking to cash in on interest in financial data, which has propelled valuations for data providers, whose information can be used by financial and technology companies to broaden their product offers and train their artificial intelligence models.

The buyout group may start an auction next year, two of the sources added. All the sources cautioned that no final decisions have been made by Permira regarding Octus, and spoke on condition of anonymity to discuss confidential matters.

A spokesperson for Permira declined to comment. Octus did not immediately respond to a request for comment.

A sale could mark a lucrative exit for Permira, which acquired a controlling stake in Octus in 2022 at a $1.3 billion valuation from Warburg Pincus, at a time when private equity firms are under pressure to deliver returns to their investors. CEO Kent Collier launched the business in 2013 and continues to hold a minority stake. 

Financial investors, exchange operators and market infrastructure players have been paying elevated prices for financial data providers in recent months due to increasing demand for data on the financial services industry.

U.S. financial data group S&P Global last week struck an all-cash deal to buy UK-based data provider With Intelligence for $1.8 billion - the equivalent to 13 times its revenue of $130 million. Other deals include BlackRock’s 2.55 billion pound ($3.42 billion) takeover of Preqin, completed earlier this year.

Octus employs journalists, analysts and legal experts to speak to industry sources, and uses technology to scour regulatory and court filings, to provide information on companies in bankruptcy and financial distress and on wider credit markets.

Private equity firms could also be attracted to Octus, with some having already studied internally a possible offer for the company, the three sources familiar with the matter said. Such bidders would be attracted by Octus’ subscription-based model, which can draw a steady flow of revenue and cashflow from its 35,000 subscribers comprising law firms, banks and investors. 

($1 = 0.8575 euros)

(Reporting by Amy-Jo Crowley in London; Editing by David French, Elisa Martinuzzi, Tommy Reggiori Wilkes and Susan Fenton)