Pearson's IDC Sale Set To Move Into Second Round - Sources
February 19 2010 - 10:22AM
Dow Jones News
The sale of Interactive Data Corp. (IDC), the U.S.-listed
financial data provider majority owned by U.K. publisher Pearson
PLC (PSO), is set to move into the second round after several
buyers submitted bids over the last week, people familiar with the
situation told Dow Jones Newswires on Friday.
Bidders for the Bedford, Mass.-based company include buyout
firms Hellman & Friedman and Silver Lake Partners, which have
teamed up to make a joint bid; Kohlberg Kravis Roberts & Co.;
and Permira, people said. Other likely bidders include Bain
Capital, Carlyle Group, TPG, Apax Partners, Blackstone Group (BX)
and Providence Equity, which may team up for joint bids, the people
said.
Amid robust interest from private equity firms, one big
uncertainty is the question of how interested financial news and
data provider Thomson Reuters Corp. (TRI) is in IDC, one person
familiar with the process said. Because of its existing operations
and expertise, the company could extract greater cost efficiencies
from a deal than most private equity partners.
But it isn't clear whether the company would face antitrust
obstacles and whether it is seriously interested in acquiring
IDC.
Because its intentions remain unclear, this person said, IDC and
its advisers remain uncomfortable about allowing it to progress to
the second round, where typically more detailed financial
information is made available. If it does bid, Thomson Reuters
could likely top the offers from private equity firms, the person
said. Thomson Reuters declined to comment.
The deadline for first bids has closed and bidders are expected
to hear further details of the process next week, people said.
Pearson, which publishes the Financial Times, and IDC said Jan.
15 that IDC's board is conducting a "preliminary review of
strategic alternatives," for IDC. Goldman Sachs (GS) has been
appointed to conduct the review and is offering staple financing,
according to people familiar with the matter.
Staple finance is typically arranged by the vendor's advising
bank in the sale of a business. The winning bidder has the option
to accept the loan on offer or make its own financing
arrangements.
Representatives for IDC and Pearson have previously referred to
an earlier statement saying they wouldn't be commenting further on
the process. Goldman Sachs wasn't immediately available to
comment.
Other strategic bidders initially reported to be interested
include Standard & Poor's owner McGraw Hill Cos. (MHP) and
Bloomberg L.P., although it isn't clear if they have bid.
McGraw Hill declined to comment, while Bloomberg couldn't
immediately be reached for comment.
IDC, which has a market value of approximately $2.9 billion
based on recent prices, is widely used by banks, asset managers and
securities companies. Pearson acquired its 61% holding in 2000,
when FT Interactive Data was merged with Data Broadcasting
Corp.
Competitors include Factset Research Systems Inc. (FDS) and
Thomson Reuters.
-By Marietta Cauchi and Jessica Hodgson, Dow Jones Newswires;
+44 207 842 9241; marietta.cauchi@dowjones.com
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