Thomson Reuters agreed to enter into a strategic partnership with Blackstone. As part of the transaction, Thomson Reuters will sell a 55% majority stake in its F&R business to private equity funds managed by Blackstone.
The F&R business is valued at approximately $20 billion. Thomson Reuters will receive approximately $17 billion in gross proceeds at closing (subject to purchase price adjustments) funded by $14 billion of debt and preferred equity to be incurred by the partnership and a $3 billion cash equity contribution by Blackstone. Thomson Reuters will retain a 45% interest in the F&R business and maintain full ownership of its Legal, Tax & Accounting and the Reuters News businesses.
Canada Pension Plan Investment Board (CPPIB) and GIC will invest alongside Blackstone for the transaction.
The F&R business provides a broad range of offerings to financial market professionals. Its global content sets include fundamentals, estimates and primary and secondary research. F&R also provides customers with tools, platforms, venues and services to enable fast, intelligent decision-making. The businesses that will comprise the new F&R partnership had 2017 revenues of approximately $6 billion.
“This deal strengthens F&R and should accelerate its growth and benefit its customers across the sell-side, buy-side and trading venues. Blackstone’s strong relationships in the financial services industry and long and successful history of corporate partnerships will help F&R provide new and innovative products and services, drive further efficiencies and navigate ongoing industry consolidation,” said Jim Smith, president and CEO of Thomson Reuters.
The new partnership will be managed by a 10-person board composed of five representatives from Blackstone and four from Thomson Reuters.
Guggenheim Securities, TD Securities and Centerview Partners are serving as advisors to Thomson Reuters. Wachtell, Lipton, Rosen & Katz is serving as legal counsel to Thomson Reuters for the transaction, with Torys serving as Canadian legal counsel. Norton Rose Fulbright is serving as legal counsel to the Thomson Reuters Founders Share Company. Canson Capital Partners, Bank of America Merrill Lynch, Citigroup and J.P. Morgan are acting as financial advisors to Blackstone. Debt financing related to the transaction is being provided by J.P. Morgan, BofA Merrill Lynch and Citigroup. Simpson Thacher & Bartlett LLP is acting as legal counsel to Blackstone.
