LONDON (Reuters) – British media group Pearson Plc (PSON.L) agreed to sell its 61 percent stake in financial data provider Interactive Data (IDC) (IDC.N) for $2 billion in cash, which it will use for faster expansion and acquisitions.
The sale is part of a deal under which the whole of IDC will be acquired by investment funds managed by Silver Lake and Warburg Pincus in a transaction with a total value of $3.4 billion, Financial Times owner Pearson said on Tuesday.
IDC shareholders will receive $33.86 per share, a premium of about 33 percent over the closing share price on Jan. 14, the last trading day before IDC announced that its board was reviewing strategic alternatives.
IDC shares closed at $32.99 on Monday.
A source familiar with the situation had told Reuters on Sunday that private-equity firms Warburg Pincus and Silver Lake were close to buying IDC for about $3.1 billion.
“Pearson and Interactive Data have extensive growth opportunities and ambitious expansion plans,” Pearson Chief Executive Marjorie Scardino said in the statement.
“We believe this transaction will give both companies greater focus and opportunity to invest more in their strong market positions,” she added. Shares in Pearson, whose market value is $13 billion, fell 1.1 percent by 0840 GMT, underperforming the European media sector .SXMP, which slipped 0.6 percent.
“The key point from Pearson’s point of view is that the money doesn’t go back to shareholders,” said analyst Alex DeGroote of brokerage Panmure.
“Ordinarily when you do a transformational deal like this, selling 15 percent of your market cap, you’d give something back,” he said.
IDC provides reference data, markets pricing and trading infrastructure services to customers including mutual funds, asset managers and banks.
It grew out of a company Pearson founded decades ago that merged with Nasdaq-listed Data Broadcasting Corp in 2000.
Rona Fairhead, who chairs IDC’s board of directors, said: “This transaction enables Interactive Data’s shareholders to realise substantial value and provides the company with partners who are committed to supporting its global expansion.”
Pearson last week issued a trading update in which it said it was confident underlying profit would grow this year after first-quarter revenues rose 12 percent at constant currencies and all parts of the company started the year well.
The company comprises the world’s biggest education business, the FT group and consumer-books publisher Penguin.
Pearson said on Tuesday it would use the sale proceeds of $2 billion before tax for expansion including through acquisitions focusing on its international, consumer and professional-education businesses.
IDC contributed 484 million pounds ($737 million) in sales and 148 million in operating profit to Pearson’s 2009 results, representing 9 percent of sales and 17 percent of profits. Its 31 percent margin was the highest of Pearson’s businesses. (Reporting by Georgina Prodhan; Editing by David Holmes and Hans Peters)