London Stock Exchange Group (LSE: LSEG) shares are up over 2% on Thursday after the company raised its full-year guidance after a record third quarter, and agreed to buy private credit data provider Octus for $3.535bn in cash. Both announcements came with the group’s third-quarter trading update.
Total income excluding recoveries grew 8.8% in the quarter on an organic, constant-currency basis, and 8.6% for the year to date. The group now expects full-year growth of at least 8.0%, against an initial range of 6.5% to 7.5%, which was lifted to 7.0% to 7.5% at the half-year.
The EBITDA margin is now guided to improve by 100 to 120 basis points, up from 80 to 100 initially. Equity free cash flow is expected to be at least £2.8bn, compared with £2.7bn previously. Chief executive David Schwimmer said the “record performance continued in Q3”, and the group is on track for its strongest annual growth since 2018.
Markets grew 12.5%, FTSE Russell 10.2% and Risk Intelligence 9.8%. Data & Analytics, the division Octus will join, was the slowest at 5.2%.
Octus, founded in 2013 and based in New York, sells credit intelligence, data and workflows, and serves customers across private, illiquid and distressed credit. It has more than 900 employees and 750 customers, and expects 2026 revenue above $300m with an adjusted EBITDA margin of around 40%. The sellers are funds advised by Permira and Octus management, including founder Kent Collier.
LSEG says the deal complements its liquid credit offering and adds weight among hedge funds and alternative managers, where it has been under-penetrated. Schwimmer said combining the two “creates a powerful offering for our customers, and further accelerates our growth.”
The purchase is financed by external debt and is expected to close in the first half of 2027, subject to regulatory approval. It is neutral to Adjusted EPS in the first full year after completion and accretive thereafter, with no change to the medium-term margin guidance.
Leverage rises as a result. LSEG expects net debt to adjusted EBITDA to sit around the middle of its 1.5-2.5x range at the end of 2026 and around the upper end at the end of 2027, pro forma for the acquisitions and buybacks, before returning to the middle by the end of 2028. The current buyback continues, with a further £0.8bn expected across the fourth quarter and first quarter of 2027, concluding by February 2027.
Schwimmer and chief financial officer Michel-Alain Proch host an analyst call at 10am UK time today.