Thomson Reuters in Talks to Sell Stake in Unit to Blackstone

01/30/18 06:24 AM EST
By Ben Dummett 

Thomson Reuters Corp. said it is in advanced talks to a sell a major stake in its financial and risk business to private-equity giant Blackstone Group LP.

The unit services banks, money managers and other financial institutions.

Thomson's financial and risk business is the news and data company's largest operation, generating more than half of the company's revenue of $11.2 billion in 2016. But it has struggled to generate revenue growth over the years, hurt by cutbacks in spending by banks forced to contend with the fallout from the credit crisis. More recently it has been hurt by uncertainty among financial institutions in Europe over the adoption of new regulatory rules known as the Market in Financial Instruments Directive or Mifid II. That uncertainty has curbed spending.

In November, Thomson Reuters, which is listed on the New York and Toronto stock exchanges, said third-quarter revenue increased by 2% from a year earlier to $2.79 billion. Organic revenues in the financial and risk business were essentially flat and fell below expectations, the company said at the time.

Thomson Reuters didn't disclose the size of the stake in the financial and risk unit that it was negotiating to sell to Blackstone. Blackstone is one of the world's largest private-equity firms, with about $387 billion of assets under management as of September last year. Thomson Reuters said it would retain a significant holding in the division.

Thomson Reuters, which is controlled by Canada's Thomson family, is also a major provider of data and software tools used by legal and tax professions, and owns the Reuters news service. Thomson said under any deal with Blackstone it would retain full ownership of those businesses.

Bolstered by the financial muscle by Blackstone, Thomson Reuters could more easily manage the volatility in the financial and risk business while gaining access to a new source of investment. Thomson Reuters competes with Bloomberg LP and Dow Jones & Co., owner of The Wall Street Journal, to sell data and analytical tools to traders of stocks and other securities.

Blackstone's interest in the deal also underscores the pressure that large private-equity firms face to maker bigger bets as they seek to deploy their cash hoards.

Write to Ben Dummett at ben.dummett@wsj.com

 

(END) Dow Jones Newswires

January 30, 2018 06:24 ET (11:24 GMT)

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