London — London Stock Exchange (LSE) has agreed to
buy The Yield Book, Citigroup’s fixed-income analytics and indexing
business, for $685m in cash, the companies said on Tuesday.
The LSE, which has said it would explore investments to drive growth after the collapse of its proposed merger with Deutsche Boerse, said the deal would boost the data and analytics capabilities of its information services and FTSE Russell franchise businesses, including an increase in benchmark assets under management to about $15-trillion.
The deal, which is subject to regulatory clearances and is expected to close in the second half of 2017, was expected to add $30m in synergy benefits to the LSE’s revenue over the first three years after completion and bring $18m in cost synergies over the same period, the company said.
In 2016 it estimated the business being acquired would have generated earnings before interest, tax, depreciation and amortisation (ebitda) of $46m on revenue of $107m based on a pro forma estimate of the central costs to be allocated to the business under the LSE’s ownership.
The LSE, which bought stock index provider and asset manager Russell Investments in 2014, expected the ebitda margin to rise to at least 50% within three years of the deal’s completion, the company said.
"The acquisition of The Yield Book and Citi Fixed Income Indices supports the continued strong growth and development of London Stock Exchange Group’s information services division," FTSE Russell CEO Mark Makepeace said.
The Yield Book business had a client base of more than 350 institutions with its services used to analyse fixed-income instruments, including mortgage, government, corporate and derivative securities, Citi said.
Citi Fixed Income Indices includes the closely watched World Government Bond index.
Citi was advised on the deal by its Institutional Clients Group. Skadden, Arps, Slate, Meagher & Flom served as legal adviser to Citi.
Barclays acted as financial adviser to the LSE, while Freshfields Bruckhaus Deringer was counsel.
The deal, announced two months after EU regulators blocked the LSE’s planned merger with Deutsche Boerse, citing concerns over a potential monopoly in the processing of bond trades, would be funded from existing cash resources and credit facilities, the LSE said.
Reuters
The LSE, which has said it would explore investments to drive growth after the collapse of its proposed merger with Deutsche Boerse, said the deal would boost the data and analytics capabilities of its information services and FTSE Russell franchise businesses, including an increase in benchmark assets under management to about $15-trillion.
The deal, which is subject to regulatory clearances and is expected to close in the second half of 2017, was expected to add $30m in synergy benefits to the LSE’s revenue over the first three years after completion and bring $18m in cost synergies over the same period, the company said.
In 2016 it estimated the business being acquired would have generated earnings before interest, tax, depreciation and amortisation (ebitda) of $46m on revenue of $107m based on a pro forma estimate of the central costs to be allocated to the business under the LSE’s ownership.
The LSE, which bought stock index provider and asset manager Russell Investments in 2014, expected the ebitda margin to rise to at least 50% within three years of the deal’s completion, the company said.
"The acquisition of The Yield Book and Citi Fixed Income Indices supports the continued strong growth and development of London Stock Exchange Group’s information services division," FTSE Russell CEO Mark Makepeace said.
The Yield Book business had a client base of more than 350 institutions with its services used to analyse fixed-income instruments, including mortgage, government, corporate and derivative securities, Citi said.
Citi Fixed Income Indices includes the closely watched World Government Bond index.
Citi was advised on the deal by its Institutional Clients Group. Skadden, Arps, Slate, Meagher & Flom served as legal adviser to Citi.
Barclays acted as financial adviser to the LSE, while Freshfields Bruckhaus Deringer was counsel.
The deal, announced two months after EU regulators blocked the LSE’s planned merger with Deutsche Boerse, citing concerns over a potential monopoly in the processing of bond trades, would be funded from existing cash resources and credit facilities, the LSE said.
Reuters
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