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Thomson Reuters eyes 'substantive' purchases after Blackstone deal

Reuters  |  TORONTO 

By Matt Scuffham

TORONTO (Reuters) - Corp is looking to make "substantive" acquisitions to boost its legal and tax units after selling a majority stake in its financial terminal business, said on Tuesday.

Smith's comments, following better-than-expected third-quarter profit announced earlier in the day, sent shares up 4.5 percent to an 18-year high.

The and information provider has set aside $2 billion for deals, Smith told in an interview, after raising $17 billion from selling 55 percent of its Financial & Risk (F&R) unit to private equity firm Blackstone Group LP .

"We are interested in bigger, more substantive deals," Smith said. "I wouldn't expect a string of small, bolt-on acquisitions. We'd rather spend that $2 billion on a handful of deals rather than spread across a couple of dozen."

could spend more than $2 billion if it found the right purchase, Smith told analysts on a conference call after reporting quarterly earnings.

"If an absolute home-run deal presented itself, we would certainly consider it," he said.

The company had previously indicated that it wanted to use the funds to bolster its Legal and businesses, which are its two biggest units after the F&R deal. Last month, it agreed to buy Integration Point, a business, for an undisclosed fee.

The F&R unit now operates as a standalone business named

Shares in Thomson Reuters have risen 35 percent since May 11, helped by its plan to buy back $10 billion of its shares. The stock hit a high of C$62.99 in afternoon trading.


Smith said the company was on track for a solid 2018 and a better performance in 2019. The company reiterated its forecast, originally given in May, for low single-digit revenue growth in 2018. On the conference call, Smith told analysts that the company's longer-term goal was for mid-single digit growth.

said she was encouraged by growth in the company's core businesses but was cautious about the outlook.

"We believe there is some uncertainty around Thomson Reuters' earnings growth over the next couple of years as the company transitions to its new operating structure," she said.

The company said it now expects adjusted earnings before interest, tax, and amortisation (EBITDA) of $1.3 billion for the year, having previously said it expected $1.2 billion to $1.3 billion. The year-ago figure was $1.6 billion. Smith said he expected underlying profit to improve next year.

For the third quarter, Thomson Reuters reported a smaller-than-expected fall in profit. Earnings per share were 11 cents, adjusted for one-time items, down from 27 cents a year ago, hurt by a higher tax expense. That beat analysts' average estimate of 3 cents, according to IBES data from

Overall revenue rose 3 percent, excluding the effect of fluctuating exchange rates, to $1.29 billion. Analysts had expected revenue of $1.32 billion, on average.

Excluding exchange rate effects, Legal revenue rose 4 percent, revenue rose 3 percent and revenue from fell 4 percent.

fell 21 percent, excluding the effect of exchange rates, to $302 million, due to the higher income tax expense from the company's continuing operations, offsetting higher earnings from its discontinued operations.

(Reporting by in Toronto; Additional reporting by Fergal Smith; Editing by Bill Rigby)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Wed, November 07 2018. 01:20 IST