BlackRock agrees to buy UK data group Preqin for £2.55bn

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BlackRock has agreed to buy Preqin, a British private-markets data group, for £2.55 billion in cash, as the world’s largest fund manager continues to push into alternative assets and for the first time enters the financial information market, according to people familiar with the matter.

The $10.5 trillion asset manager beat out S&P Global and Bloomberg to acquire Preqin in the latest in a series of deals for specialized data providers, they added. The transaction is expected to be announced on Monday.

Data vendor arrangements have become commonplace in recent years as private equity firms, asset managers and larger IT companies compete to serve investors who want access to detailed information on all areas of the financial markets, including private equity, infrastructure and hedge funds.

Other data providers that have changed hands in recent years include S&P Global’s $44 billion acquisition of IHS Markit in 2020 and the London Stock Exchange Group’s $27 billion acquisition of Refinitiv. Buyout groups focused on smaller players, which included Permira acquiring a majority stake in Reorg, which valued the distressed debt and bankruptcy information provider at about $1.3 billion.

The deal marks BlackRock’s second major private markets-focused acquisition in six months. In January, it entered into an agreement worth USD 12.5 billion to purchase Global Infrastructure Partners. This acquisition is expected to close in the third quarter.

The Financial Times was the first to report that Preqin was for sale and the bidder was BlackRock.

The Preqin deal brings together two areas that BlackRock Chief Executive Larry Fink has described as key to the money manager’s continued growth: alternative assets and BlackRock’s technology division, which provides risk and data management services to both public and private asset managers.

Founded 20 years ago, Preqin specializes in tracking the performance of private equity and hedge funds. It now has about 200,000 users and provides data on 60,000 fund managers and 30,000 investors. Its revenue has grown by more than 20 percent annually over the past three years. The company’s turbocharged growth is providing long-term growth for private capital, which is expected to reach more than $40 trillion in assets by the end of the decade.

BlackRock will pay 13 times Preqin’s expected 2024 revenue of $240 million.

The company is led by Mark O’Hare, who is expected to become BlackRock’s vice chairman. The company also attracted interest from private equity investors but ultimately opted for acquisition by a strategic rival.

BlackRock plans to keep Preqin as a separate offering, but also integrate its data feeds with the company’s Aladdin and eFront risk management offerings. The transaction is expected to close this year.