Nasdaq to buy Thomson Reuters PR, IR units for $390 million

Wed Dec 12, 2012 12:07pm EST
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By John McCrank

(Reuters) - Nasdaq OMX Group Inc said on Wednesday it agreed to buy Thomson Reuters Corp's investor relations, public relations and multimedia services units for $390 million, as the exchange operator builds businesses that do not depend on trading.

The all-cash deal will add to Nasdaq's earnings within 12 months of closing, excluding transaction-related costs, the company said.

Nasdaq (NDAQ.O: Quote) is looking to sell additional services to the companies that list on its exchanges as a way to draw more revenue from its corporate customers. It already gets more than 70 percent of its revenue from businesses that do not depend on transactions.

The Thomson Reuters (TRI.TO: Quote)(TRI.N: Quote) units that Nasdaq is buying help companies communicate with investors and media and create and distribute video presentations.

Nasdaq already provides some of these services, but the acquisition will broaden its offerings and make them more global, bringing 7,000 new clients in more than 60 countries.

The units Nasdaq is acquiring generated $233 million of revenue in the 12 months ended September 30. That figure represents about 2 percent of Thomson Reuters' revenue in that period, but more than 7 percent of Nasdaq's revenue.

Nasdaq said it is funding the deal with available cash - the company had $438 million of cash and equivalents on its books at September 30 - and through its $750 million line of credit.

Nasdaq considered buying back shares but decided this deal would offer a higher return to shareholders, Chief Executive Robert Greifeld said on a conference call.   Continued...

A man walks near a Thomson Reuters logo at the Thomson Reuters building in Canary Wharf in east London May 7, 2009. REUTERS/Toby Melville