We tip our hat to LSE for thinking outside the box, moving beyond a commodity business to acquire a somewhat unique data set (one of the big three with Bloomberg and Factset).
- Blackstone Group (BX.N) acquired a majority stake in Refinitiv from Thomson Reuters (TRI.TO) in October 2018, valuing the company at the time at $20 billion including debt. Thomson Reuters retained a 45% equity stake. Post Refinitiv acquisition Thomson Reuters would retain a 15% equity stake.
- Refinitiv had $12.2 billion in debt as of the end of December 2018, thus valuing the equity at approximately $15 billion.
- The combined LSE Refinitiv business generated revenue of approximately 6 billion GBP ($7.4 billion).
- Post deal-close LSE Refinitiv would be the clear number two competitor to Bloomberg LP’s data business.
Should the LSE successfully close the Refinitiv acquisition it will have leapfrogged Intercontinental Exchange (tkr: ICE), which a few years ago stated that data-centric businesses would become a greater focus for the company (ICE acquired Interactive Data Corp. for approximately $5.2 billion in 2015). However, we are not sure to what degree this deal may be competitive. Our assumption is this deal is competitive and that ICE is a natural acquirer.
Hat tip to LSE CEO David Schwimmer, who prior to joining LSE in August 2018 was a Goldman Sachs executive.