Interactive Data Agrees to Leveraged Buyout

Chandrasekhar Atreya
05 May, 2010
New York City

Interactive Data Corp agreed to be acquired by private funds managed by Silver Lake and Warburg Pincus for $3.4 billion or $33.86 a share. The sale raises the prospect that Pearson Plc, 61% stake holder in the company may sell Financial Times.

[R]8:20 AM New York – Interactive Data Corp agreed to be acquired by private funds managed by Silver Lake and Warburg Pincus for $3.4 billion or $33.86 a share. The sale raises the prospect that Pearson Plc, 61% stake holder in the company may sell Financial Times.[/R]

Interactive Data Corporation, a leading provider of financial market data, analytics and related solutions, today announced that it has entered into a definitive agreement to be acquired by private investment funds managed by Silver Lake and Warburg Pincus for $3.4 billion at $33.86 per share in an all cash deal.

Back on January 15, the company announced that its board was conducting a preliminary review of strategic expansion alternatives for the company including a potential sale. The news sent the stock surging to 16% next day above $29.

The agreement was unanimously approved by the Interactive Data board of directors, taking into consideration the recommendation of the special committee of four independent directors formed as part of the previously disclosed review of strategic expansion alternatives.

In addition, Pearson plc, Interactive Data''s majority stockholder with 61% stake has formally approved the transaction.

The $33.86 per share price represents a 32.9% premium over the closing price on January 14. IDC expects that the deal will close in the third quarter.

Rona Fairhead, chairman of Interactive Data''s board of directors, said: ""This transaction enables Interactive Data''s shareholders to realize substantial value and provides the company with partners who are committed to supporting its global expansion.""

Interactive Data will remain headquartered in Bedford, Massachusetts and maintain its offices around the world. The company will continue to be led by its senior management team and expects to continue expanding its workforce over time.

The Interactive Data deal will be funded with a combination of equity invested by Silver Lake and Warburg Pincus and debt financing provided by Bank of America Merrill Lynch, Barclays Bank, Credit Suisse Securities and UBS Investment Bank.

IDC had Goldman Sachs as financial advisors and Morgan, Lewis & Bockius as legal advisors.

Silver Lake and Warburg Pincus had Credit Suisse Securities as lead financial advisor, Barclays Capital, Morgan Stanley and UBS Investment Bank as financial advisors and Simpson Thacher & Bartlett as legal advisor.

Under the terms of the agreement announced today, Interactive Data is prohibited from declaring future regular quarterly dividends or any special dividends to stockholders. In light of today''s announcement, Interactive Data announced that it will postpone its 2010 annual meeting until further notice which was previously scheduled on May 25 at Boston.

2009 revenue in IDC was $194.1 million compared to $192.09 in 2008. 2009 earnings were $33.05 million compared to $43.13 million in 2008.