Private equity eyes FactSet after share slump, but AI disruption fears cloud deal prospects
NEW YORK, March 5 — Private equity firms Thoma Bravo and Hellman & Friedman have in recent months evaluated a potential acquisition of financial data provider FactSet after a sharp decline in the company’s share price, though concerns about disruption from artificial intelligence have tempered deal interest, three people familiar with the matter said.
FactSet’s shares have fallen about 39% over the past six months, partly reflecting investor concerns that advances in artificial intelligence could reshape the financial data and analytics industry.The stock’s decline has drawn attention from private equity investors seeking opportunities in established data providers whose valuations have weakened.Buyout firms assess potential dealPeople familiar with the matter said both Thoma Bravo and Hellman & Friedman reviewed the company’s financials and assessed the feasibility of a potential acquisition in recent months.The discussions were exploratory in nature and no formal offer has been made, the sources said, speaking on condition of anonymity because the deliberations were private.Private equity firms have historically shown interest in companies that provide subscription-based financial data services, which often generate recurring revenue and stable cash flow.AI concerns weigh on valuationInvestor sentiment toward financial data companies has become more cautious as artificial intelligence technologies rapidly expand their role in data analysis and information services.Market participants have increasingly debated whether new AI tools could alter how financial professionals access and process data traditionally provided by established analytics firms.Those concerns have contributed to the decline in FactSet’s share price in recent months, according to the people familiar with the matter.Sector under investor scrutinyThe financial information industry has long been dominated by large data providers offering analytics platforms used by investment managers, banks and corporations.Private equity investors often examine companies in the sector when valuations weaken, particularly if they believe operational improvements or strategic changes could enhance long-term returns.However, the evolving technological landscape, including the potential impact of artificial intelligence on data distribution and analysis, has made some investors more cautious when evaluating acquisition opportunities in the space
