Warburg, Silver Lake to buy IDC for $3.4 bn

Warburg Pincus LLC and Silver Lake agreed to buy Pearson Plc’s Interactive Data Corp, a provider of financial market data and services, for $3.4 billion, in the biggest private-equity deal this year.

IDC shareholders will get $33.86 for each share they own, London-based Pearson said in a statement today. Pearson will receive about $2 billion before tax for its 61 per cent IDC stake, it said. The price is 32.9 per cent more than IDC’s closing share price on Jan. 14, 2010, the last trading day before Pearson said it was seeking alternatives for the unit.

“The price is better than expected, which is encouraging and this signals re-entry of private equity into deal flow and the media sector,” said Alex DeGroote, an analyst at Panmure Gordon & Co in London. The deal had been estimated at about $3.1 billion, he said.

Buyouts are picking up after US stocks rose 30 per cent the past year and a rally in credit markets fueled lending. Pearson, which owns the Financial Times newspaper and Penguin Books, said it will use proceeds from the IDC sale to expand through bolt-on acquisitions, with a particular focus on technology and education assets.

“Pearson and Interactive Data have extensive growth opportunities and ambitious expansion plans, and we believe this transaction will give both companies greater focus and opportunity to invest more in their strong market positions,” Pearson Chief Executive Officer Marjorie Scardino said in the statement.

Pearson shares rose as much as 1.7 per cent and were trading 1.6 per cent lower at 1,034 pence as of 11:14 am in London. Interactive Data, based in Bedford, Massachusetts, fell 1.4 per cent to $32.99 a share in New York.