REG - LondonStockExGroup - LSEG to divest BETA+

London Stock ExchangeAnnouncement

21/03/2022 11:30

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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                                      +44 (0)20 7628 1000

 James Robertson

 Tom Brown

 Clearlake

 Jennifer Hurson                                   +1 845 507 0571

 Motive

 Sam Tidswell-Norrish                              +44 (0)7855 910 178

 

Additional Financial Information - BETA+

 

                                              2021 (£m)
 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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