A consortium led by Washington buyout house Carlyle Group (CG) announced an agreement Wednesday to acquire New York- and London-based investment-banking data provider Dealogic Holdings Ltd. from its management and founders in a $700 million deal.
Carlyle's co-investors are financial publisher Euromoney Institutional Investor plc, which is taking a 15.5% stake, and Randall Winn, co-founder and former CEO of Capital IQ, now part of McGraw Hill Financial Inc.
Euromoney is paying $59.2 million for its equity share in the acquisition vehicle Diamond Bidco Ltd. But in a complicated maneuver, it will finance the deal by selling two existing joint ventures with Dealogic, Capital DATA and Capital NET, back to Diamond Bidco for $85 million in cash and shares.
Euromoney said that, as well as the equity stake, its shares will entitle it to a seat on the new Dealogic board, 20% of the voting rights and the right to invest alongside Carlyle in any future acquisitions by Dealogic. However, Euromoney has also agreed to cap the payout it receives on any future sale of its investment in Dealogic at £350 million ($559 million), or 24.9% of its own market capitalization, based on its closing price of 1,103 pence on Tuesday.
The statement continued: "Euromoney will continue to receive and use (on a perpetual royalty-free basis) the league tables and data analytics products underpinning its GlobalCapital business.
"New Dealogic and Euromoney will explore further strategic and commercial opportunities, including sharing of content management systems and joint product development for specific customer groups."