In a rare sign of life for the large-cap private equity community, Pearson (LON:PSON) announced that it is to sell its 61% stake in Interactive Data Corporation in a deal worth $2bn before tax. Interactive Data Corporation (NYSE: IDC), which provides financial market data, analytics and solutions, has agreed to be acquired by investment funds managed by Silver Lake and Warburg Pincus. The transaction has a total value of $3.4bn.
Interactive Data Corporation is a leading global provider of financial market data, analytics and related solutions to financial institutions, active traders and individual investors. Interactive Data, headquartered in Bedford, Mass., has approximately 2,400 employees in offices located throughout North America, Europe, Asia and Australia.The Company's businesses supply real-time market data, time-sensitive pricing, evaluations and reference data for millions of securities traded around the world. According to the Company, many of the world's best-known financial service and software companies subscribe to the Company's services in support of their trading, analysis, portfolio management and valuation activities.
The $33.86 per share cash deal represents a premium of about 32.9% over the closing share price on January 14, the last trading day before Interactive Data announced its board was reviewing strategic alternatives. In 2009, Interactive Data contributed £484m in sales and £148m in operating profit to Pearson. After tax and minority interests, its contribution to the group's adjusted earnings was £55m or 6.8p per share. Pearson says it plans to use the proceeds to accelerate expansion, including bolt-on acquisitions, with a particular focus on adding complementary technology and services.
In other news, Pearson announced last week that all parts of the company have made a good start to 2010. The group is trading in line with its expectations, and continues to expect another year of underlying profit growth.
Pearson generated £1.08bn in revenues in the first quarter, an increase of 7% in headline terms and 12% at constant currencies. Marjorie Scardino, CEO, said:
'The first quarter never tells us a great deal about the full-year, but our direction of travel is encouraging. Our leadership in global education and the rapid growth of our digital and services businesses across Pearson continue to propel strong trading. We've seen some improvement in markets that were tough for us through the recession, but we remain cautious about the economic outlook. Still, we're confident that we can build on our consistent record of profit growth…
