Clearlake, Motive to acquire BETA+ from LSEG for USD 1.1bn

Wahida Ahmed
21 March 2022

Tweet
Facebook
LinkedIn
Google plus
Send to

Clearlake Capital and Motive Partners have agreed to acquire BETA, Maxit, and Digital Investor, in a carve-out of assets from Refinitiv, the data analytics arm of the London Stock Exchange Group (LSEG).

The new owners will pay a total cash consideration of USD 1.1bn for the assets, which are collectively referred as BETA+, according to a statement.

The deal is expected to close in the second half of 2022, according to a statement. BETA+ provides back-office processing solutions to the wealth management industry, including securities processing and tax reporting. It had revenues of approximately USD 300m, primarily linked to US markets.

Mergermarket reported in January that Refinitiv's Beta was in advanced stages of a sale process advised by Bank of America. According to the report, BETA was being marketed off an EBITDA of around USD 150m region.

According to a statement, the acquisition creates a standalone platform that Clearwater and Motive intend to expand through a buy-and-build strategy, supported by Clearlake's proprietary O.P.S. framework and Motive's value creation plan. The plan is to build critical platform infrastructure on the back of the wealth workflow and use proprietary tools to augment BETA+'s platform technology; enter new high growth markets; enhance the platform for existing clients; and grow partnerships within the joint wealth networks of the sponsors.

A similar growth plan was executed with InvestCloud, a wealth management platform in which Motive and Clearlake co-invested in February, 2021. The statement also noted that the new owners will focus on developing long-term strategic partnerships between BETA+, the sponsors' other portfolio companies and LSEG, to offer new products and operational efficiencies to clients across these various platforms.

The statement also noted that the sponsors will focus on developing long-term strategic partnerships between BETA+, the sponsors' other portfolio companies, and LSEG, to offer new products and operational efficiencies to clients across these various platforms.

Motive is deploying equity via Motive Capital Fund II. The fund is expected to have a target size in the USD 1bn-USD 1.5bn range, according to Unquote Data.

Previous funding
Refinitiv was formerly Thomson Reuters' financial and risk business. In October 2018, a Blackstone consortium, which included GIC and the Canada Pension Plan Investment Board, acquired a majority interest of 55% in the carved-out business while Thomson Reuters retained 45% in a USD 20bn deal, according to Unquote Data.

In January 2021, Thomson Reuters and Blackstone sold Refinitiv to the LSEG in an all-share transaction. The deal was estimated to be around an EV of USD 27m.

Company
Refinitiv is an LSEG business as of February 1, 2021. It provides financial markets data and infrastructure. BETA is a securities processing business, Maxit provides a cost and tax basis reporting software, and Digital Investor provides front-end client solutions, known collectively as BETA+.

BETA posted GBP 46m in revenue for 3Q21, versus GBP 52m year-on-year down by 11.5%; the LSE pointed to "customer mix" as a reason for the decline in its trading update, as reported.

The LSEG is headquartered in the UK and employs 25,000 people worldwide.

People
London Stock Exchange Group - David Schwimmer (CEO).
Motive Partners – Sam Tidswell-Norrish (managing director).
Clearlake Capital - James Pade (partner & managing director).

Advisers
Equity – Wells Fargo (corporate finance); Sidley Austin (legal); Deloitte (tax due diligence); BCG (commercial due diligence); Gibson, Dunn & Crutcher (legal).