May 13, 2019 / 1:06 PM / a year ago

Breakingviews - Mergermarket’s fourth owner faces the toughest job

Raymond Svider, Chairman and Partner, BC Partners, speaks at the 2019 Milken Institute Global Conference in Beverly Hills, California, U.S., April 30, 2019. REUTERS/Lucy Nicholson

LONDON (Reuters Breakingviews) - Mergermarket helps bankers and lawyers win business by keeping them abreast of the latest M&A developments. The financial news service has itself been a prodigious source of advisory fees in its short life. Ion Group, its fourth owner in 13 years, faces arguably the toughest job yet.

The Irish software and data company is buying Acuris – which owns Mergermarket, Debtwire and other financial-information products – from BC Partners for 1.35 billion pounds including debt. The private-equity group bought the main business for 382 million pounds in 2013 from publishing group Pearson, which in turn paid Mergermarket’s founders and other shareholders about 101 million pounds, plus earnouts, for the company back in 2006.

It looks like a tidy sale for BC, which has made about five times its initial investment - including a partial sale to Singapore’s sovereign wealth fund GIC in 2017 – according to a person familiar with the deal. That’s well above the rule of thumb that says private equity firms need to double their money in five years to please investors. Under the buyout group’s ownership, the company’s revenue has grown at a compound annual average rate of about 13 percent, boosted by acquisitions of smaller financial-information services, according to a Breakingviews analysis of corporate filings.

That growth helps justify the toppy-looking acquisition multiple of more than 20 times trailing EBITDA, according to a person familiar with the deal. Ratings agencies like Moody’s Corp and S&P Global trade at about 19 times EBITDA, while companies selling capital markets information change hands at about 16 times, using Refinitiv data. Refinitiv itself was valued at about 13 times in the recent sale to Blackstone Group by Thomson Reuters, owner of Breakingviews, Credit Suisse analysts reckon.

Ion should be able to make some savings by combining sales staff and technology costs with its own business-to-business products. The Irish group bought British financial-technology group Fidessa last year, and has a range of financial data and information services which it sells to many of the corporate clients Mergermarket would like to reach.

BC is keeping a minority stake, hedging some of the risk inherent in buying a private-equity portfolio company. Still, deep-pocketed peers like Bloomberg are gunning for the same customers. Paying such a high price makes it unlikely that Ion’s investment will produce the returns enjoyed by previous owners.


Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.

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