TIDMLSEG
RNS Number : 4503F
London Stock Exchange Group PLC
21 March 2022
21 March 2022
LSEG to divest BETA+ to Clearlake and Motive and enters
strategic partnership in Wealth with BETA+
London Stock Exchange Group plc ("LSEG") today announces it has
agreed to divest BETA, Maxit and Digital Investor (collectively
"BETA+") to affiliates of Clearlake Capital Group L.P ("Clearlake")
and Motive Partners ("Motive") for a total cash consideration of
$1,100 million ("the Transaction"), 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 our leverage range.
Consistent with our 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. We 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."
Sabrina Bailey, Global Head of Wealth, Data & Analytics,
LSEG said:
"We are delighted to establish a long-term strategic partnership
with BETA+ as we reposition our Wealth business to focus on LSEG's
core strengths. We look forward to collaborating with Motive and
Clearlake as we deliver on this exciting opportunity in the growing
Wealth segment, offering scaled access to new market channels for
our business."
Behdad Eghbali, Co-Founder and Managing Partner, and James Pade,
Partner, of Clearlake:
"BETA+ has established a strong position in the self-clearing
technology space and broader wealth management ecosystem with a
reputation for meeting the unique needs of global financial
institutions and their clients. We look forward to partnering with
Motive, the BETA+ team and LSEG as the company continues to provide
best-in-class solutions to its blue-chip customer base."
Stephen C. Daffron, Co-Founder and Industry Partner at Motive
Partners:
"BETA+, together with our other portfolio companies, will be
focused on creating frictionless, digital-first experiences for
clients, advisors, and home office personnel with streamlined
processes, reduced costs, and increased retention and satisfaction,
ultimately making it easier for Wealth clients to obtain solutions
which address their financial needs. We're looking forward to
partnering with Clearlake once again to continue our transformation
of the wealth management sector at a critical time for the
industry."
For further information, please contact:
LSEG
Media:
UK - Lucie Holloway / Rhiannon Davies +44 (0)20 7797 1222
US - Lemuel Brewster/ Alexis Weakley +1 917 805 1089/ +1 646
794 7205
Investor Relations: Paul Froud
ir@lseg.com
BofA Securities (Sole Financial Adviser
to LSEG)
Fraser Allan
James Robertson
Tom Brown +44 (0)20 7628 1000
--------------------------
Clearlake
Jennifer Hurson +1 845 507 0571
--------------------------
Motive
Sam Tidswell-Norrish +44 (0)7855 910 178
--------------------------
Additional Financial Information - BETA+
2021 (GBPm)
Total Income 225
------------ ---------------------------------
Operating Expenses (80) Excludes central cost allocation
which remain in LSEG
------------ ---------------------------------
Depreciation
Amortisation
& Impairments (49)
------------ ---------------------------------
BETA+ will be treated as a discontinued operation and
accordingly 2021 revenues will be re-based.
Important Notices
Merrill Lynch International ("BofA Securities"), a subsidiary of
Bank of America Corporation, which is authorised by the Prudential
Regulation Authority and regulated by the Financial Conduct
Authority and the Prudential Regulation Authority in the United
Kingdom, is acting exclusively for LSEG in connection with the
matters set out in this announcement and for no one else and will
not be responsible to anyone other than LSEG for providing the
protections afforded to its clients or for providing advice in
relation to the subject matter of this announcement or any other
matters referred to in this announcement.
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END
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