Key Takeaways
- • LSEG confirmed on October 13 that it is in advanced talks to acquire Octus from Permira for roughly $3.5 billion, with no final agreement reached yet.
- • The price represents more than 2.5 times the $1.3 billion Permira paid in August 2022 for the business, then known as Reorg, which it bought from Warburg Pincus.
- • Octus is on track for about $145 million in EBITDA this year and roughly $200 million by 2027, implying about 24x 2026 EBITDA and 17.5x projected 2027 EBITDA, according to LSEG's disclosure.
- • Octus serves more than 35,000 industry professionals, according to company figures, and LSEG says its tools would be immediately accretive to revenue growth in its Data & Analytics division.
- • The talks coincide with heightened credit-market stress around AI-linked debt, including CoreWeave's CDS spread moving above 1,140 bps before settling near 1,088 bps.
Summary
The London Stock Exchange Group confirmed on October 13 that it is in advanced talks to buy Octus, the credit data firm, from Permira for roughly $3.5 billion. LSEG stated that the deal would be immediately accretive to revenue growth in its Data & Analytics division and that no final agreement has been reached, with no certainty that one will be.
Octus, founded in 2013 as Reorg, tracks the full credit lifecycle for hedge funds, banks, law firms and advisory firms, with a particular focus on illiquid and private credit. It provides real-time intelligence on who holds positions in a credit deal, what covenants require, and what happens if a deal breaks down. Permira took control of the business from Warburg Pincus in August 2022 at a valuation just above $1.3 billion. The proposed price would therefore represent a gain of roughly 170% over four years.
According to LSEG's own disclosure, Octus is on track for about $145 million in EBITDA this year, rising to roughly $200 million by 2027. At $3.5 billion, LSEG would be paying about 24 times this year's EBITDA, or about 17.5 times projected 2027 EBITDA. Octus reports serving more than 35,000 professionals across investment banks, asset managers and law firms.
The timing reflects growing concern in credit markets over AI-linked debt. According to the source, CoreWeave's five-year credit-default-swap spread spiked above 1,140 basis points this month, before settling near 1,088 bps, still up 177% from a year ago. CoreWeave reportedly owes close to $50 billion, per LSEG's data, and Gartner warned this month that 80% of independent neocloud providers are likely to fail within four years. Oracle, Nvidia, Amazon, Alphabet and Meta have also seen their CDS spreads widen, though by far less than CoreWeave.
LSEG already sells fixed income data and analytics and has been expanding its private markets coverage, and it says Octus's workflow tools fit directly into both. As private credit has grown into a multi-trillion-dollar market, demand for information on covenants and capital-structure exposure has increased, and the source argues that this is the basis for the premium valuation.
Octus, founded in 2013 as Reorg, tracks the full credit lifecycle for hedge funds, banks, law firms and advisory firms, with a particular focus on illiquid and private credit. It provides real-time intelligence on who holds positions in a credit deal, what covenants require, and what happens if a deal breaks down. Permira took control of the business from Warburg Pincus in August 2022 at a valuation just above $1.3 billion. The proposed price would therefore represent a gain of roughly 170% over four years.
According to LSEG's own disclosure, Octus is on track for about $145 million in EBITDA this year, rising to roughly $200 million by 2027. At $3.5 billion, LSEG would be paying about 24 times this year's EBITDA, or about 17.5 times projected 2027 EBITDA. Octus reports serving more than 35,000 professionals across investment banks, asset managers and law firms.
The timing reflects growing concern in credit markets over AI-linked debt. According to the source, CoreWeave's five-year credit-default-swap spread spiked above 1,140 basis points this month, before settling near 1,088 bps, still up 177% from a year ago. CoreWeave reportedly owes close to $50 billion, per LSEG's data, and Gartner warned this month that 80% of independent neocloud providers are likely to fail within four years. Oracle, Nvidia, Amazon, Alphabet and Meta have also seen their CDS spreads widen, though by far less than CoreWeave.
LSEG already sells fixed income data and analytics and has been expanding its private markets coverage, and it says Octus's workflow tools fit directly into both. As private credit has grown into a multi-trillion-dollar market, demand for information on covenants and capital-structure exposure has increased, and the source argues that this is the basis for the premium valuation.
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