JSM Financial: Private equity firms Warburg Pincus and Silver Lake Partners to buy IDC.

May 3, 2010 - PRLog -- Sources close to the situation have said that the private equity companies, Warburg Pincus LLC and Silver Lake are nearing an agreement to buy Pearson Plc’s Interactive Data Corp, JSM Financial has been told.

Pearson Plc which owns the Financial Times newspaper and the world’s largest educational publishing business as well as Penguin Books, also owns around 61% of the financial-market data provider and said at the beginning of the year that it was undertaking a preliminary review of strategic alternatives, causing a 30% jump in IDC stock price.

JSM Financial has learned that the price for IDC of $3.1 billion is around the same level as its current market value. Two other groups of private-equity firms, including Kohlberg Kravis Roberts and CVC Capital Partners are also believed to have bid for Interactive Data.

Goldman Sachs who are representing Pearson Plc have suggested to the bidders that it could offer debt financing at a multiple of between 5.5 and 5.75 times IDC’s earnings before interest, taxes, depreciation and amortization, JSM Financial has been informed, with other banks suggesting offering slightly higher leverage multiples.

IDC’s CEO earlier this year forecast that the firm would increase its revenue to as much as $830 million in 2010 and generate operating income margins of as high as 26%.

“Producing substantial net cash provided by operating activities has been a hallmark of Interactive Data’s business model for many years, and we expect this trend to continue in 2010,” JSM Financial believes he was quoted as saying.

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