The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

Interactive Data Confirms is Exploring “Strategic Alternatives”, But Who is Big Enough to Buy it?

Subscribe to our newsletter

Interactive Data has confirmed today that it is exploring “strategic alternatives” for its future, but has declined to provide any more explanation as to what these alternatives may include. The number three data provider in the financial markets is likely seeking a suitable marriage partner, but who is likely (or able) to offer its hand?

Interactive Data has performed relatively well during the market downturn and worked hard to earn its place as the number three data provider, after mega corporations Thomson Reuters and Bloomberg, but it seems that Pearson, which owns a majority stake in the business, is reviewing whether to sell up and exit the financial services business. Pearson owns a 61% stake in Interactive Data, which is valued at US$2.4 billion and was acquired back in 2000. The publishing giant seems keen to get away from the financial services market in general and is also rumoured to be in talks to sell the Financial Times, potentially to Bloomberg.

The option for the sale of Interactive Data has also long been in the background but was deemed unlikely to happen under the stewardship of Interactive Data veteran CEO Stuart Clark. Clark, however, was replaced by ex-president of sales and marketing for the vendor, Raymond D’Arcy, last year and it seems the new management is much more open to the idea.

But who is in a position to buy the business? If the rumours about the FT are indeed true, Bloomberg may be in the frame, but given its previous reticence to purchase large organisations, this seems unlikely. It may also face anti-trust issues (a significant problem for vendors of its size) and this issue would also likely affect rival Thomson Reuters. Moreover, given that Thomson Reuters is still in the throes of a merger, engaging in another may prove to be a bridge too far.

This puts Standard & Poor’s into the frame. It has a reasonably compatible set of businesses; Lou Ecclestone’s FIRMS business line in particular would sit particularly nicely alongside the Interactive Data pricing and valuations offering. It is also likely to be more of a culturally appropriate fit for the data vendor than one such as Bloomberg, which has not traditionally been focused on the back office space.

Of course, there’s always the private equity option and it seems likely that Interactive Data’s relatively robust performance over the recession period will have caught the eye of the private equity world. Interactive Data’s revenue rose by 1.2% to US$563 million in the nine months to September 30 last year. This stability in times of stress will make it an attractive, if expensive, proposition.

For now, we’ll have to wait and see what transpires. According to a spokesman for Pearson: “Pearson and Interactive Data can give no assurance on the potential outcome or timing of this review process, and do not intend to make any further statements unless and until it becomes appropriate to do so”.

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: The evolution of market surveillance across sell-side and buy-side firms

Market surveillance is crucial, and in many cases a regulatory requirement, to ensuring orderly securities markets and sustaining confidence in trading. It can be breached and has become increasingly complex in the wake of the Covid pandemic, Brexit, and the emergence of new asset classes. This webinar will review the extent of market abuse in...

BLOG

Compliance-as-a-Service Provider Lawson Conner Adopts Acquirer IQ-EQ’s Brand Name

Lawson Conner, a UK-based regulatory hosting and outsourced compliance business, has rebranded as IQ-EQ, the name of investment funds service provider that acquired it in 2018. The rebrand of the compliance as-a-service provider comes at a time when the Financial Conduct Authority (FCA) has prioritised raising standards in the appointed representatives segment. IQ-EQ’s acquisition added...

EVENT

TradingTech Insight Briefing New York

TradingTech Insight Briefing NYC will explore how trading firms are innovating and leveraging technology as a differentiator in today’s cloud and digital based environment.

GUIDE

Regulatory Data Handbook 2021/2022 – Ninth Edition

Welcome to the ninth edition of A-Team Group’s Regulatory Data Handbook, a publication dedicated to helping you gain a full understanding of regulations related to your organisation from the details of requirements to best practice implementation. This edition of the handbook includes a focus on regulations being rolled out to bring order and standardisation to...