Interactive Data agrees to $3.4b acquisition
The financial data provider had been exploring strategic options, including a potential sale. Interactive Data Corp.'s biggest shareholder, U.K. publisher Pearson PLC, and its board of directors have approved the deal. Interactive stockholders will receive $33.86 in cash for each share they own. This represents an approximately 33 percent premium over its Jan. 14 stock price, the last trading day before it decided to explore options.
Interactive Data has approximately 2,400 employees in offices throughout North America, Europe, Asia, and Australia. Five hundred employees are located in Massachusetts. Its main business is providing financial market data, analytic tools, and related informational products to financial institutions, traders, and individual investors.
The firm reported $141.2 million in net income on $757.2 million in revenue last year. In its most recent earnings call, in February, Interactive Data’s chief executive, Ray D’Arcy, forecast that the company would increase revenue to as much as $830 million this year and generate operating income margins of 25 percent to 26 percent.
A press release on the $3.4 billion deal included a statement from Jim Neary, managing director at Warburg Pincus, who said: “This acquisition aligns well with our financial technology and information investment theses; Interactive Data is a market leader that provides critical data to its customers. We look forward to partnering with them, and Silver Lake, as the company continues to grow and expand its footprint.”
Interactive Data offers services through four businesses: Interactive Data Pricing and Reference Data, Interactive Data Real-Time Services, which provides global market data; Interactive Data Fixed Income Analytics; and eSignal, which streams real-time financial market information for investors and traders.
Interactive Data was launched in 1968 as a computer time-sharing firm for banks, money management firms, and other financial services companies.
Over time, it evolved through a series of mergers into Financial Times Information/Interactive Data, which was 100 percent owned by Pearson.
In 2000, when FT Interactive Data merged with Data Broadcasting Corp., Pearson retained approximately 60 percent of the shares of the postmerger company, the current Interactive Data.
Pearson is the publisher of the Financial Times newspaper and Penguin Books; it also owns many educational publishing businesses, some with offices in Boston. In January, the company said it was reviewing options for what to do with its stake in Interactive Data, which is publicly traded. Since that time, sale rumors have persisted.
The acquisition is expected to close before the third quarter's end.