UPDATE: Two Teams Withdraw From IDC Auction - Sources
April 28 2010 - 12:22PM
Dow Jones News
Two companies have withdrawn from bidding for Interactive Data
Corp. (IDC), the financial data provider majority owned by Pearson
PLC (PSO) as the process begins to draw to a conclusion, people
familiar with the matter told Dow Jones Newswires Wednesday.
McGraw-Hill Cos. (MHP), and Hellman & Friedman LLC, both of
which were earlier in the bidding for the Bedford, Mass.-based
financial data provider, have withdrawn their interest in the
asset, these people say.
McGraw Hill wasn't available to comment on its interest in
IDC.
The two firms' withdrawal of interest comes as a second round
closes in the ongoing auction of IDC, leaving three separate
private equity consortia in the running, people said. Second-round
bids, which follow a period of some due diligence, or access to
confidential financial information, are due 5pm Eastern time
Wednesday, people said.
The remaining contenders are a consortium consisting of buyout
giant Kohlberg, Kravis, Roberts & Co. and CVC Capital Partners
Ltd.; Warburg Pincus LLC and Silver Lake Partners, and Advent
International Corp., bidding with Bain Capital LLC.
Pearson, which publishes the Financial Times newspaper and owns
a large U.S. educational publishing business, said in January it
was conducting a "preliminary review of strategic alternatives,"
for IDC, in which it owns a 61% stake. A Pearson spokesman declined
to comment. Goldman Sachs (GS), which is running the auction,
didn't immediately respond to a call for comment.
Some people familiar with the matter have said that certain
bidders felt the price of the asset was in danger of becoming
prohibitively high. IDC's stock price has risen by almost a third
since January, when it became known that Pearson was reviewing
strategic options, although it has since fallen back.
The publicly traded portion of the company's equity is now
trading at $32.90, suggesting the transaction value for the whole
of IDC could approach $3.5 billion. A successful bidder would
likely be expected to write an equity check for roughly $1.4
billion, a person familiar with the matter said.
Goldman Sachs has told bidders it could offer debt financing at
a multiple of up to 5.75 times IDC's earnings before interest,
taxes, depreciation and amortization, people familiar with the
matter said. Other banks have suggested multiples could go as high
as 6.5 times Ebitda.
-By Jessica Hodgson and Marietta Cauchi, Dow Jones Newswires;
+44207 8429373; jessica.hodgson@dowjones.com.