By Hamza Faisal

The London Stock Exchange Group is making its biggest acquisition in seven years. LSEG said on Thursday it has agreed to buy Octus, a credit-intelligence and data provider, for $3.535 billion in cash from funds advised by private equity firm Permira and Octus' management, including its founder and chief executive Kent Collier.

The deal is LSEG's largest since its $27 billion purchase of Refinitiv in 2019, and it arrived alongside a stronger-than-expected third quarter: gross profit rose 9.5% to £2.21 billion, total income climbed 8.4% to £2.50 billion, and the group raised its full-year guidance for organic income growth to at least 8%.

Investors cheered both the deal and the numbers. LSEG shares jumped as much as 6% in London trading, erasing all of their 2026 losses — a sharp turnaround for a stock punished by fears that artificial intelligence could undercut the financial-data industry.

Proprietary data AI can't 'scoop up'

Octus, founded in 2013 by Collier and previously known as Reorg, sells intelligence, breaking news and data on distressed debt, leveraged loans, insolvencies and other lending. It employs more than 900 people, serves 750 customers and over 40,000 individual users — including buy-side firms, investment banks, law firms and advisory firms — and is expected to generate $300-320 million in revenue this year.

Chief executive David Schwimmer framed the acquisition as a direct answer to the AI-disruption anxiety weighing on LSEG's shares. Octus' highly specialised, proprietary data is something "no large language model was going to be able to scoop up anywhere," he said, adding that combining it with LSEG's data and analytics business "creates a powerful offering for our customers, and further accelerates our growth."

The acquisition is expected to close in the first half of 2027, subject to regulatory approvals, and will be financed with external debt, pushing LSEG's leverage to the upper end of its 1.5-to-2.5-times target by the end of 2027. Collier will continue running Octus inside LSEG's data and analytics division. LSEG expects the deal to be neutral to adjusted earnings in the first full year after completion, and accretive thereafter.

Elliott, AI fears, and a turnaround bet

LSEG has been under pressure on several fronts. Activist investor Elliott Management disclosed a stake in February and has been pushing for portfolio changes and margin improvements, while the shares sat about 24% below their 2025 peak on concerns that AI could disrupt the data business.

The company has been fighting back: it has partnered with AI firms including OpenAI and Anthropic to roll out AI tools and license its proprietary data, and alongside Octus it acquired credit-trading platform Trumid to build what Schwimmer called a global leader in fixed income data and trading.

"The planned acquisition of Octus adds valuable proprietary solutions in the high-growth illiquid and private credit space," Schwimmer said. The private credit industry is forecast to grow at double-digit rates, and LSEG says Octus' coverage is highly complementary to its existing listed-credit datasets.

LSEG also guided to £1-1.5 billion in share buybacks next year — a signal it has cash left over even after the all-cash acquisition. RBC Capital Markets called the deal's financials "attractive, with strong strategic logic," settling nerves that hit the shares when Bloomberg first reported the talks earlier this month.

By Hamza Faisal