According to a news story on Thomson Reuters’ news service Interactive Data Corporation (IDC) is up for sale five years after it was purchased by private equity firms Silver Lake and Warburg Pincus. The firms are expected to sell IDC in a deal that could value the financial information business at $5.5 billion including debt, or make an initial public offering (IPO) to dispense of their 96% holding in the company, the remainder of which is held by company management.
Silver Lake and Warburg Pincus bought IDC from Pearson in 2010 in a deal that valued the company at $3.4 billion. The private equity firms went on to invest significant sums in the company, allowing it to develop sophisticated products and services such as Apex, which was released in October 2012. Apex includes all IDC’s reference data and offers a wide selection of reference data service delivery and access mechanisms. The company has also been looking at possible mergers of operational functions with partners.
While products and services have been developed at IDC under the ownership of Silver Lake and Warburg Pincus, the outcome of a sale of the company or IPO is unclear. Companies in the frame to buy IDC could be large, competitive financial information providers such as Thomson Reuters, Bloomberg or FactSet, but an acquisition on the scale of IDC and its integration would be a challenging task and raise questions about the future of IDC’s products and services, as well as its management team. An IPO could be less disruptive, but like a sale would offer no guarantees of product continuity for IDC customers and no assurances for the management team.