LSEG to divest BETA+ to Clearlake and Motive
London Stock Exchange Group plc (LSEG) today announced it has agreed to divest BETA, Maxit and Digital Investor (collectively “BETA+”) to affiliates of Clearlake Capital Group L.P and Motive Partners for a total cash consideration of $1,100 million, before tax and separation costs.
The Transaction is expected to complete in H2 2022 and is subject to the satisfaction of certain customary conditions, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and certain customer consents.
This divestment, together with strong ongoing cash generation, will de-lever the Group towards the middle of its leverage range. Consistent with LSEG’s capital allocation framework, LSEG anticipates returning a significant proportion of the net proceeds to shareholders, via a buyback, while still continuing to support organic and inorganic growth opportunities and maintaining our leverage ratio within the target range of 1-2x. LSEG will announce further detail in due course with any buyback likely to commence in Q3.
BETA+ provides back-office processing solutions to the wealth management industry, including securities processing and tax reporting. In the year ended 31 December 2021 it had revenues of approximately $300 million, primarily linked to US markets.
In addition, LSEG announces that it has entered into a new long-term strategic partnership for data, content and tools with BETA+ and portfolio companies owned by Motive and Clearlake. The partnership will provide LSEG with new, recurring revenues at attractive growth rates through access to new client segments.
The divestment of BETA+ and the new strategic partnership reposition the growth profile of the Wealth segment of LSEG’s Data and Analytics business which will now target mid-single digit annual revenue growth in the medium term.
Andrea Remyn Stone, Group Head Data & Analytics, LSEG said:
“The divestment of BETA+ will focus LSEG’s Wealth business on meeting our customers’ needs in high growth areas. This includes the provision of data, analytics and workflow tools where we have deep capabilities and where LSEG is driving innovation. The partnership with BETA+ under its new owners offers a platform for further revenue growth in content and data while ensuring continuity for customers under a new owner focused on this segment of the market.”