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London Stock Exchange Group plc (OTC: LSEGY) had a busy Thursday. The company delivered its third-quarter 2026 trading update, raised its outlook for fiscal 2026, and separately announced it will acquire Octus, a provider of credit solutions, for $3.535 billion in cash.
The seller is a group of funds advised by Permira along with Octus' management. LSEG's stock was up 0.18% at $29.05 in premarket trading on Thursday.
Total income excluding recoveries rose 8.8% on an organic basis to 2.41 billion Pounds ($3.22 billion). The subscription businesses grew 6.6% organically to 1.45 billion Pounds, led by Data & Analytics (up 5.2%), FTSE Russell (up 10.2%) and Risk Intelligence (up 9.8%).
The Markets division did even better, with organic income up 12.5%. That was driven by a 16.7% increase in OTC derivatives and a 14.4% increase in Fixed Income, Derivatives & Other.
Average daily trading volumes at Tradeweb climbed 22.4% to $3.2 trillion. Equities rose 9.4%, reflecting higher trading activity across its venues and continued growth in data revenues.
Gross profit increased 9.9% organically to 2.21 billion Pounds.
Then there is the AI story, which is moving faster than you might expect for a 300-year-old exchange operator. LSEG said 95% of its top 200 customers are using its AI products, and more than two-thirds of its top 50 customers are using MCP connection. AI Search in its Workspace platform reached 47,000 users, up 30,000 from the half-year results in mid-July.
On the capital return front, LSEG repurchased 500 million Pounds of shares in the third quarter, taking cumulative buybacks in the year to 2.6 billion Pounds. The company expects to repurchase a further 0.8 billion Pounds in the fourth quarter and the first quarter of 2027, with capacity for another 1.0-1.5 billion Pounds in 2027.
LSEG raised its full-year 2026 guidance for revenue, EBITDA margin and free cash flow. It now expects organic constant currency growth in total income excluding recoveries of at least 8.0%, EBITDA margin expansion of 100-120 basis points, and equity free cash flow of at least 2.8 billion Pounds.
CEO David Schwimmer said the company is on track to deliver its strongest annual growth since 2018, with acceleration in its subscription businesses' organic growth and continued strong growth in its Markets division.
The Octus deal is the headline. LSEG will pay $3.535 billion in cash to acquire the credit-solutions provider from funds advised by Permira and Octus' management, including founder Kent Collier. That price implies an EV-sales multiple of approximately 11.8 times, based on Octus' 2026 expected revenue of $300 million.
Octus specializes in illiquid and private credit, and its portfolio is meant to complement LSEG's existing fixed income offerings. The goal is a single source of fixed income data, analytics and workflow spanning the entire credit spectrum.
The math here is not small. LSEG estimates the private credit industry market is valued at $3.5 trillion. The addressable private markets data, workflow and access solutions segment represents a $7 billion to $9 billion opportunity, with double-digit growth expected.
The transaction is expected to be immediately accretive to LSEG's Data & Analytics organic revenue growth and additive to its guidance for organic subscription revenue growth of around 7% in 2027. It is expected to close in H1 2027, subject to regulatory approval.
And it is not a one-off. Earlier this week, on Oct. 19, Tradeweb announced it would acquire Trumid, an electronic credit trading marketplace, for $1.75 billion. LSEG says the two highly complementary businesses will accelerate its strategy in fixed income, building a global leader in intelligence, data, workflows and trading across the entire credit liquidity spectrum.
In other words, LSEG is not just running an exchange anymore. It is assembling a credit intelligence machine, one deal at a time.
LSEGY Price Action: London Stock Exchange ADR was up 0.18% at $29.05 during premarket trading on Thursday, according to market data.
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